8:26 am, February 19, 2025
Stellantis UK boss Eurig Druce has called on the government for a multi-point assistance package to help car makers hit their ZEV mandate targets.
Speaking exclusively ahead of his appearance at this year’s Car Dealer Live event on March 13, Druce said a cut in VAT on the purchase price of new electric cars should be introduced as soon as possible.
He said this, and his other ideas to boost demand, would have ‘very little cost to the government’ and help car makers hit tough ZEV mandate targets that require them to sell 80% EVs within five years.
Druce said this year’s target of hitting EV sales of 28% will be ‘very tough’ for car makers and warned that hitting the 80% goal by 2030 ‘would not happen naturally’ without help from the government.
The Stellantis chief said he wants to see:
- VAT cut on new EV sales
- Public charging infrastructure outpace EV sales with help from the taxpayer
- VAT on public charging cut to the same rate as home charging (5%)
- Road tax cut for EVs
- Return of the plug-in car grant
Druce took over from Maria-Grazia Davino, who left Stellantis to head-up BYD Europe in October, and leads Vauxhall, Peugeot, Citroen, Fiat, Alfa Romeo, Jeep, Abarth, and DS in the UK.
He said: ‘From a government point of view, we need a number of different items. First of all, a strategy that’s 360. What I mean by that is that there is support and an acceleration in terms of charging.’
Druce believes it is vital that the number of public chargers far outweighs the number of electric cars on the road.
He thinks charging companies need support from the government to ramp up installs as they would be ‘loss making’ until the number of electric cars sold catches up.
He added: ‘At the moment, there’s sufficient chargers out there for the number of BEVs in the market.
‘But if you want to compel a directional move in terms of the demand from the consumer, you have to make it really, really, really easy to charge and therefore have a number of chargers way in excess of the number that are required in the market.’
Druce said he was surprised to see fuel duty frozen in the budget and thought this was ‘out of sync’ with the ‘step change the government is hoping to achieve’ in its transition to EVs.
On other incentives he’d like to see for EV buyers, he added: ‘As a retail customer, some level of support to push you into that [electric] vehicle, whether that’s a guarantee on vehicle excise duty over a number of years, a reduced level of VAT, or the reintroduction of the old grant system to push people.
‘I think that compelling retail demand is what we need. So support either in reduced VAT on purchase or a grant system, that’s got to be the number one on the priority.
‘If you do a back of a fag packet calculation, you very quickly understand that there’s very little cost to the government in introducing some of these items.’
Is the government listening?
Ministers have been consulting with the automotive industry on changes needed to the ZEV mandate since Christmas Eve.
Druce said he does think the government is taking note, but wants to see more ‘cohesion’ between the different departments – especially back up from the Treasury.
He does believe, though, that ‘some flexibilities’ to the tough ZEV mandate targets may be conceded as a result of the talks.
He added: ‘Positively, the government is consulting intensively. I have been involved in a number of meetings in London with ministers.
‘But I think there’s probably a point to be made about the cohesion of discussions across government.
‘There has been understanding and discussions with the Secretary of State for Transport and the Secretary State for Business and Industry, but we haven’t had that interaction with the Treasury.
‘Of course, if you don’t have all of these departments together, then we’re not making the kind of progress that we need to make.’
He added: ‘I think we will see adjustments in flexibilities, but I don’t expect any change in terms of trajectory of the transition [to 80% by 2030].
‘In many respects, that’s okay because from the industry, we’ve invested into the products that will deliver the trajectory.’
Druce added that he did not think car manufacturers restricting supply of petrol and diesel cars to hit their targets was a good thing because ‘that’s not good for our economy’.
‘Restricting sales of any goods is not good in terms of income for the government,’ he added.
‘So that’s why I would argue that we could push volume here across the industry and therefore be relatively cost neutral in terms of any incentives that we want to introduce.’
Druce questioned whether a mandate on the introduction of charging points should also be introduced to match the EV sales targets.
He said: ‘We have to have charging infrastructure that’s accelerating way ahead of the ZEV mandate. It’s interesting that we have a mandate on vehicle manufacturers, but there is no mandate on vehicle charging.
‘But I think [hitting the 80% by 2030 target] is possible. Other countries have proven that it’s possible. If you look at Norway, they’ve demonstrated it’s possible.
‘But not with a stick alone. You have to have a 360 complete plan in order to make this kind of fundamental change in the way that we drive day to day.’
Eurig Druce will be appearing on our car manufacturer panel at Car Dealer Live on March 13 at the British Motor Museum. Tickets for car dealers and suppliers are available from the event website.
