Receive free UK business updates
We’ll send you a myFT Daily Digest email rounding up the latest UK business news every morning.
The UK car industry will still have to meet mandatory electric vehicle sales targets from January, according to people briefed on the upcoming government rules, despite ministers pushing back a ban on petrol cars.
Hours after Rishi Sunak on Wednesday delayed the introduction of the UK ban on sales of new petrol and diesel cars from 2030 to 2035, ministers contacted industry figures to tell them that planned EV targets still stand, said people familiar with the discussions.
But sector insiders are worried the goals are now harder to hit for carmakers because the delayed ban on petrol cars will put consumers off buying EVs.
The UK EV sales scheme, modelled partly on China’s quota system, involves manufacturers being required to sell an increasing proportion of zero emission cars every year this decade or face fines of up to £15,000 a vehicle.
Modest tweaks will be made to the scheme, but an initial target requiring 22 per cent of each carmaker’s sales in 2024 to be zero emission will remain, as will the goal of 80 per cent in 2030, said people briefed on the arrangements.
Interim targets, which include a provision that more than half of new car sales are EVs in 2028, may change slightly, they added.
Although in 2030 manufacturers will be able to make 20 per cent of their sales through petrol, diesel and hybrid cars, that proportion will shrink every year in the run-up to 2035.
Full details of the UK scheme are expected to be published by the government later this week.
Government insiders said the continuation of the EV sales scheme showed ministers were still serious about shifting Britain towards electric cars.
Ministers are convinced that various flexibility measures built into the scheme, such as manufacturers being able to over achieve in future years they miss early EV sales targets, will ensure that none of the companies pay penalties.
But carmakers have warned that Sunak’s new 2035 deadline for a ban on sales of petrol and diesel cars, part of a wider watering down of the government’s net zero goals, will deter consumers from buying EVs.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, the car industry trade body, said the delay to 2035 would lead to “confusion” among motorists.
“The concern is this does cause consumers to delay their purchase,” he added.
The SMMT this week sounded the alarm over falling demand for EVs from consumers, many of whom are put off by high car prices and inadequate charging infrastructure.
Currently anyone buying an EV through a company car scheme or salary sacrifice programme receives generous tax incentives.
However, purchase incentives for consumers were wound down by the government last year.
Hawes said the delayed ban on sales of petrol cars “must be backed up with a package of attractive incentives and measures to accelerate charging infrastructure to give consumers the confidence to switch” to EVs.
The government has been approached for comment.
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here