Sometimes what politicians say does not exactly match what they do! Rishi Sunak caused great controversy at the Conservative conference when he announced that he was postponing the UK’s plan to phase out new petrol and diesel vehicle sales from 2030 to 2035. This was designed to present the Conservatives as the party of road users, and it delighted the very vocal car lobby. It also upset environmentalists, confirmed the government’s reputation for indecision, and alarmed car manufacturers. Some commentators argued that bringing the UK into line with the EU, who had already set 2030 as a deadline, lost British manufacturers an important commercial advantage over their European competitors.
Now you see it: now you don’t
However, all is not what it seems. The government has now quietly confirmed (with much less media attention), that while the absolute ban will indeed move to 2035, the previous interim targets remain. These have legal force and are backed by fines, following models in place in China and California. They are among the toughest regulations in the world, and mandate manufacturers to reduce the share of petrol and diesel vehicles produced in stages over the next seven years.
They require all manufacturers in the UK to progressively increase the proportion of zero-emission vehicles sold: by 22% by 2024, 33% by 2026, 52% by 2028, and 80% by 2030. Most firms will probably not think it worthwhile to continue internal combustion production for only 20% of their output. So, in practice, petrol and diesel production is likely to phase out as fast as originally promised.
The original 2030 phase-out target was vague and non-binding, and pleasing the car lobby by abandoning it, costs the Prime Minister nothing, since the Zero-Emission Vehicle (ZEV) mandate wields the real authority. However, a penalty of £15,000 per vehicle is a very serious incentive to a manufacturer to meet the interim targets.
So how is progress?
At present UK manufacturers, overall, seem reasonably placed to achieve the short term targets. Battery-electric vehicles constituted 16% of total car sales in the first half of this year, up from 6.6% in 2020. Achieving 22% by next year and 28% by 2025 will require continuing growth, and investment in charging infrastructure. However, individual firms differ, with some much better prepared than others for the transition. Predictably, firms specialising in electric vehicles, like Tesla and Polestar are way ahead, but at present they represent only 3% of the new car market. A second group, BMW, Volvo and Mercedes, are close to the target, with Volkswagen and Hyundai and the Volkswagen Group close behind. The laggards, with much distance to make up, are Honda, Ford and Toyota, who together have 16% of the new car market.
The other constraint on progress is the roll out of public charging points, which is hampering public confidence in EVs. At present we have around 50,000. But the government’s target is to reach 300,000 by 2030. Although the number grew by over 40% last year, continuing a growth rate of over 30% a year for another seven years will be a stretch.
Divide and survive?
As so often, ‘the devil is in the detail’. This time, Sunak may have succeeded in finding a ‘wedge’ issue to divide Conservatives from their opponents, without actually changing anything significant. It will consolidate the support of the car enthusiasts behind the Conservatives, and like the famous £350 million a week savings from Brexit, it will be a long time before supporters notice that nothing has changed. Meanwhile, it will antagonise people who were never going to vote Conservative anyway.
It is clever, and the politics of division, which so many people hate.
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