Vehicle manufacturing supports 813,000 UK jobs (Image: PA)
The 2030 ban on new petrol and diesel cars is set to cost thousands of jobs, carmakers warn. Ministers want motorists to switch to electric vehicles instead but the plan is on course to fail without urgent action to encourage people to buy the high-tech cars.
The warning came from the Society of Motor Manufacturers and Traders (SMMT), which represents the automotive sector. There are 813,000 people employed in vehicle manufacturing and related businesses in the UK but the society said it fears factories will close. Van-making firm Stellantis has already announced in will close a plant in Luton, Bedfordshire, impacting around 1,100 jobs.
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Mike Hawes, SMMT chief executive, said: "We need to be pulling every lever to grow this demand because the consequences of this regulatory framework and an inability to meet it, you’re beginning to see play out in terms of flattening of sales, production is down, plants unfortunately closed or certainly consolidated, jobs lost.
READ MORE: These petrol and diesel owners face ￡15,000 car tax bill from this date
“Nobody wants that, because this should be a driver of growth, not a driver of de-industrialisation.”
Conservatives had delayed the ban on the sale of new petrol and diesel cars to 2035 but Labour has brought it back to 2030.
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Mr Hawes described the decision to remove EVs’ exemption from vehicle excise duty and the expensive car supplement as “disincentives” for people to switch to electric motoring.
Under the Government's zero-emission vehicles (Zev) mandate, at least 28% of new cars sold by each manufacturer in the UK this year must be zero-emission, which generally means pure electric. The market share held by pure electrics last month was 25.3%.
Failure to abide by the mandate or make use of flexibilities – such as buying credits from rival companies or making more sales in future years – will result in a requirement to pay the Government ￡15,000 per polluting car sold above the limits.
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The SMMT’s modelling suggests halving VAT on new EV purchases would boost the market by a further 15% on top of current outlooks, delivering a total of two million new EVs by 2028. This would have an initial cost to the Treasury of around ￡1,000 per car, the SMMT said.
But combined with flexible regulation and mandated roll out of charge points, it would have benefits such as increasing business for charge points, insurance, maintenance and other sectors, and reducing road transport emissions, according to the automotive body.
A survey commissioned by the SMMT indicated just 11.6% of new car buyers intend to switch to electric in the next three years. But nearly two in five so-called electric sceptics said they would change their mind with a purchase incentive.
Mr Hawes said investment by manufacturers means “10 times as many drivers are going electric compared with just five years ago”.
He went on: “This is great progress but with the right support for consumers, we can go beyond current expectations to put a total of more than two million new EVs on the road by 2028. Government investment to convert the electric sceptics would energise business across the country far beyond just the automotive sector.
“Every stakeholder would benefit from the impact of consumer incentives which, when combined with binding targets for charge point rollout and more flexible regulation, would create a virtuous circle of rising demand that stimulates green economic growth.”
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The Zev mandate percentages rise each year, reaching 80% of new cars in 2030. The Government is analysing feedback from a recent consultation on proposed changes to the rules, which could include making it easier for non-compliant manufacturers to avoid fines.
It has previously committed to reverse then-prime minister Rishi Sunak’s decision in September 2023 to delay prohibiting the sale of conventionally fuelled new cars and vans from 2030 until 2035.
Mr Hawes also said the automotive industry “doesn’t want to see an increase in tariffs”, after President Donald Trump announced a 25% tax on US imports. He praised the Government for “treating things very calmly” in its response, adding: “Cool heads can hopefully prevail.”