The Prime Minister of the UK, Rishi Sunak (Conservatives), is attempting to water down the UK policy to ban the sale of new combustion vehicles in 2030. The British car industry doesn’t seem happy at all with this policy change.

“To give us more time to prepare, I’m announcing that we’re going to ease the transition to electric vehicles; you’ll still be able to buy petrol and diesel cars and vans until 2035,” Sunak said in a speech on Wednesday.

The ban on internal combustion vehicles in the UK was brought forward from 2035 to 2030 in 2020 under then Prime Minister Boris Johnson. The measure was part of a ten-point plan for a ‘green industrial revolution’. Johnson wanted to combat climate change and create new jobs, for example, in the energy sector.

“We’re aligning our approach with many other countries like Germany, France, Spain, Italy, Australia, Canada, and certain US states like California, New York, Massachusetts, and still ahead of many others,” Sunak now says.

It’s a little bit odd he didn’t mention the European Union as a whole, which has adopted the same 2035 limit, giving Germany the exemption for cars driving on carbon-neutral synthetic fuels to go over this limit.

Sunak’s decision is apparently also about jobs, but rather about preserving existing jobs – the British prime minister fears being overtaxed if the economy is hastily restructured. “For too many years, politicians in governments of all colors have not been honest about costs and trade-offs. Instead, they have taken the easy way out and said we can have it all,” Sunak explained.

“This realism does not mean we lose our ambition or abandon our commitments. Quite the opposite.” Sunak said his government is committed to achieving net zero CO2 emissions by 2050.

Criticism from all sides

Criticism of Sunak’s alleged plans comes not only from the opposition Labour Party but also from within its own ranks. Two Conservative MPs criticized the approach to the BBC.

Zac Goldsmith, who resigned as minister in January in a row with Sunak over the latter’s “apathy” on climate change, sees Britain’s credibility on environmental issues at risk. “His short stint as PM will be remembered as the moment the UK turned its back on the world and on future generations. A moment of shame,” Goldsmith said.

But also the industry concerned isn’t pleased at all. According to CEO Mike Hawes of the Society of Motor Manufacturers & Traders (SMMT), the transition to electric cars in Britain will be hindered by any confusion over climate policy.

“The automotive industry has and continues to invest billions in new electric vehicles as the decarbonization of road transport is essential if net zero is to be delivered,” Hawes commented to Reuters.

“To make this a reality, however, consumers must want to make the switch, which requires from the government a clear, consistent message, attractive incentives, and charging infrastructure that gives confidence rather than anxiety,” he added. “Confusion and uncertainty will only hold them back.”

“Our business needs three things from the UK government: ambition, commitment, and consistency. A relaxation of 2030 would undermine all three,” commented Ford’s UK boss, Lisa Brankin, to the BBC. Ford has already invested 430 million pounds to prepare its British plants for the production of electric cars, she said.

Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “Pushing back the 2030 ban on new petrol and diesel sales by five years is a hugely retrograde step which puts politics ahead of net zero goals.”

“This U-turn will cause a huge headache for manufacturers, who are crying out for clarity and consistency, and it is hardly going to encourage the vast majority of drivers who are yet to buy an electric car to make the switch,” he added.

“Rather than grasp the challenge and use the tax system to ease concerns over affordability, the Prime Minister has taken the easy option with one eye on polling day,” he concluded.

Private buyers in the cold

Sales of new electric cars in the UK have soared in recent years, but concerns have emerged about a decline in the number of private buyers.

Figures from SMMT show 267 000 new pure-battery electric cars were registered last year. That represented a market share of 16,6%, surpassing diesel for the first time to become the second most popular powertrain after petrol. The market share of pure electrics has risen from 1,6% in 2019 to 6,6% in 2020 and 11,6% in 2021.

But more detailed SMMT figures show the proportion of purchases of new battery electric cars by private buyers has fallen from more than a third (36,2%) in the first half of 2022 to less than a quarter (24,2%) during the same period this year.

This has partly been attributed to the Government’s decision to scrap grants for new electric cars in June last year. Like in many other countries (with Belgium as an outstanding example), the vast majority of new electric cars in the UK are being bought by fleets and business owners, which can benefit from various tax incentives.

Consistency

Many governments have been announcing big ‘green’ plans to counter climate change, involving a paradigm shift (the energy transition) in the car industry policies. Now that in many countries, elections are coming closer, the same politicians are backtracking.

The reaction in the car industry is that there is absolutely no consistency in the policies made and that it’s very difficult to plan the future. The problem is that, until recently, there was no consistency either in the traditional car industry about the path to follow.

That’s the reason why brands like Tesla and an ambitious bunch of Chinese car makers have been taking over the electric car market, leaving the traditional manufacturers spread-eagled in a very uncomfortable position.

An additional problem has been the pandemic, disorganizing the entire industry and pushing a lot of so-called generalists under pressure to produce bigger and more expensive cars with a higher profit margin. The results of this, we are seeing now.

The individual private buyer is dropping out. Battery electric cars are still too expensive for him as subsidies and other incentives are drying up, making him postpone the purchase of a new car, not knowing what will be a good choice for the future.

It’s about time that politicians show some consistency in their plans, aiming for a clear vision of the future and the organizational and economic consequences that come with it. However, recent quarrels and sudden changes in views and policies are far from promising. Shouldn’t we go for a little bit more courage?