10:59 am, October 23, 2024
The ZEV mandate has been labelled ‘political suicide’ that puts ‘manufacturing plants ‘at serious risk of being closed’in a lengthy House of Lords debate.
The EV Strategy debate saw the higher chamber pour over the findings of a recent report on the road to electrification from parliament’s Environment and Climate Change Committee.
The full report, published back in February, took evidence from car dealer suppliers, manufacturer bosses and trade chiefs.
Among its conclusions, it found that the up-front costs of EVs remain a ‘significant barrier to consumer adoption’ and it called on the government to ‘turbo charge’ the rollout of public charging points.
It also recommended the ‘equalisation of VAT rates for domestic and public charging’, adding that charging infrastructure must be ‘reasonably priced, convenient, and reliable’.
Following the report’s publication, the Tory Government, led by Rishi Sunak, rejected the majority of the recommendations but it has now been subject to a debate by the Lords.
Among those to speak on the issue was Lord Woodley, a former trade union leader who previously worked for Vauxhall at its Ellesmere Port plant.
He described the ZEV mandate as ‘political suicide’ and said it put sites like Ellesmere Port at risk of closure due to ‘unsustainable pressure on manufacturers’.
He said: ‘I am going to concentrate on manufacturing EVs and the financial penalties which put an unsustainable pressure on manufacturers.
‘For a successful transition, we need to review the present inflexible approach, developed by the civil servants who produced the zero emission vehicles mandate.
‘This was designed when we had a growing economy, interest rates were low—as was the cost of finance—and sales were picking up, which was hoped would lead to lower costs for manufacturing batteries and other things.
‘However, that is not the case now. The market has collapsed, apart from fleet sales, so we need incentives, both to build and to buy. The ZEV mandate requires manufacturers to sell a percentage of new EVs each year from 2024.
‘It starts this year at 22% and progresses, hitting 80% in 2030. The mandate therefore means that if 22% of your total UK sales are not electric vehicles, for every non-EV vehicle sold up to the target number you will be fined—£15,000 per car. It is ridiculous.’
He added: ‘Presently, the industry is falling short of its quotas: by about 4%, which equals—wait for it—£1.4bn in fines. Companies are already subsidising each electric vehicle by about £6,000 to get sales, which means extra costs of £2bn on top of the £1.4bn in fines. It is simply unsustainable for our industry.
‘Ironically, fines of £15,000 per vehicle under the target can be offset by purchasing credits from those who have exceeded their targets, which can be only the Chinese or Tesla.
‘Either way, the money will not be there for jobs or investment. The idea of UK manufacturers paying the Chinese or the Americans billions in credits is a nonsense and, I suggest, political suicide in automotive constituencies across the country.
‘The answer is two-fold. First, there needs to be a VAT reduction and equalisation of VAT on public and private charging, and the VED extra tax on expensive car purchases—unfortunately, electric vehicles are expensive at the moment—needs to be scrapped.
‘Secondly, we need a ZEV mandate adjustment, including using 2024’s figures as a reset mechanism to assess the actual market for EVs, and to adjust the trajectory to 2030 accordingly.
‘We should include EV exports from the UK and commercial vehicle EV sales within the credits. The two Vauxhall plants in the UK, which make only vans, are caught up in this quotas turmoil.
‘Let us be clear: these plants, which the last Government put money into, are at serious risk of being closed if the credits are not sorted out.’
His input was welcomed by Vertu boss Robert Forrester, who described Lord Woodley’s speech as ‘brilliant’.
We cannot get to net zero without EVs
Despite the Labour Lord Lord Woodley’s criticisms, other Lords came out in favour of the ZEV mandate and called on the government to stand strong behind the controversial measures.
Baroness Parminter – who sat on the Environment and Climate Change Committee when it was producing its report – said that the rules were important and called for more EV incentives in the upcoming Budget.
The Lib Dem peer, who spoke to Car Dealer earlier this year, told the debate: ‘We cannot get to net zero without EVs, and we need our Government to face down people who do not believe in net zero.
‘We may not have a Conservative Government, but we certainly have Reform UK down the other end who see this as a rallying cry, and there are siren voices in this House and beyond who need to be called out.
‘The Government need to take every opportunity they have — they have one coming up in the Budget in a couple of weeks — to make it clear to the public that they are on this journey and they are going to support people on it and make some critical interventions, including the equalisation of VAT and a clear statement on not watering down the ZEV mandate, so that people know where they stand and the direction of travel.
‘As our committee said, that should be allied with a 10-year road map which gives car companies policy certainty, investors the confidence to invest and people the information they need.’
You can read the full transcript of the debate on via Hansard or watch the stream at the top of this story.
