All UK car manufacturers could be exempted from fines for meeting their 2024 electric vehicle sales targets | automobile industry

No UK car manufacturer will have to pay a fine for missing its 2024 electric car sales target, according to analysis.

According to estimates by T&E, a campaign group focused on transport and environmental issues, all but one carmaker has sold enough cars or is able to use so-called flexibilities to avoid huge fines under zero-emission vehicle (ZEV) obligations. They say it will. . Japanese automaker Suzuki has to buy credits from competitors to avoid fines.

But strong industry lobbying, based on concerns that ZEV sales will not grow significantly next year, is expected to persuade ministers to relax their plans and help most manufacturers avoid fines in 2026 as well.

Brands including best-selling Volkswagen, Ford, Toyota and Britain's largest carmaker JLR, which operates Jaguar and Land Rover, are among those that will have to use additional loopholes to avoid fines, according to T&E's analysis.

Graphic showing how automotive groups use credits to meet legal emissions requirements

Car manufacturers will be required to sell increasing numbers of electric vehicles each year under the UK's ZEV mandate. It was introduced by the previous Conservative government to push industry to reduce its planet-heating carbon emissions.

If manufacturers fail to meet the target, they will be fined up to $15,000 for each car that exceeds the fossil fuel vehicle quota. The industry has mounted a strong campaign to persuade the Labor government to ease regulations, amid stagnating demand for electric vehicles and similar efforts in the EU.

Automakers have set a goal of filling 22% of total sales with electric vehicles in 2024, increasing to 28% this year and 80% in 2030. Actual battery sales achieved last year reached an all-time high of 19.6%. But the rules contain a major loophole, described as allowing automakers to not only earn credits by reducing emissions from fossil fuel vehicles they sell, but also the flexibility to borrow credits in future years.

A T&E analysis based on detailed revenue figures from Dataforce suggests that the actual target is around 18%. The campaign group said the lack of expected fines showed the UK government should not relax the rules.

Anna Krajinska, director of T&E UK, said: The surge in EV sales in 2024 proves car manufacturers are hitting their targets. The government must now focus on delivering a strong industrial strategy for the sector to maintain its ZEV mandate ambitions and support UK car manufacturing to continue to drive down costs for consumers.

The analysis found that Geely, the Chinese owner of BMW, Mercedes-Benz and Volvo, could meet its 2024 target solely through battery car sales, as could electric-only brands Tesla and BYD. The company can sell the credits to the highest bidder.

However, the industry argues that help is needed because demand for electric vehicles is not yet high. Automakers say they have been forced to offer unsustainable discounts to attract enough buyers.

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Mike Hawes, chief executive of the lobby group Society of Motor Manufacturers and Traders, said the government could not yet calculate compliance as it had borrowed money without officially confirming data for 2021. [from expected future sales] It would be risky if sales did not increase.

Manufacturers must bridge the gap between the ambitions of the ZEV mission and market reality, a gap that has already cost the industry about $4.5 billion in discounts alone, Hawes said. These are prohibitive costs that cannot be sustained indefinitely, but with EV market growth forced to approximately 50% this year, costs are likely to rise further, threatening jobs, market growth and business viability.

Government sources said they expected changes to flexibility while keeping the headline target the same. But the exact form of the changes will depend in part on formal evaluation of requests from competing automakers.

Suzuki has not sold an electric car in 2024, but plans to launch the electric eVitara this year, and a spokesman admitted it would be exploring all options to avoid fines, including deals with other car manufacturers. A Volkswagen spokeswoman said it was too early to say what flexibility would be used.

A Ford spokeswoman said the company would use its flexibility and confirmed it would not have to pay a fine.

However, the company added: The compliance costs of this plan are not sustainable under current market conditions. Consumer incentives are critical to increasing demand, especially in the van market, which is underutilized compared to passenger vehicles.

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