UK Government Launches Industry Consultation on 2030 Petrol, Diesel Car Phase-Out

A former BMW boss said EU rules are unlikely to lead to a significant reduction in carbon emissions and ‘will simply cost the industry a lot of money.’

A sign directs toward electric vehicle charging points in a car park in Manchester, England, on Sept. 8, 2023. Phil Noble/Reuters

The UK government has announced a consultation on its zero-emission vehicle target following warnings from the car industry that net-zero mandates could force brands to exit the UK market.

Under the UK’s current net zero targets, carmakers must ensure that a certain percentage of their sales are zero-emission vehicles, or face stiff financial penalties.

On Dec. 24, British Transport Secretary Heidi Alexander launched an eight-week consultation to gather views on which cars can be sold alongside zero-emission vehicles from 2030.

While she floated the idea of carmakers potentially selling fewer zero-emission vehicles than the headline target “if they make up for it in other ways,” the government clarified that the targets themselves remain non-negotiable. Instead, the consultation aims to explore “how, not if, we reach the 2030 target,” she said.

Carmakers have warned they face nearly 6 billion pounds ($7.6 billion) in compliance costs to meet the UK’s strict electric vehicle (EV) sales mandate and have urged the government to reconsider its course of action.

UK rules require that at least 22 percent of new cars sold in 2024 be zero emission.

Under the UK’s Zero Emission Vehicle (ZEV) mandate, introduced by the previous government, manufacturers face fines of 15,000 pounds ($19,000) per internal combustion engine (ICE) vehicle sold beyond the set limits.

This policy is part of the government’s commitment to phasing out internal combustion engine vehicles by 2030 and hybrid cars by 2035.

The ban on sales of these vehicles was extended to 2035 under the previous Conservative government, but the current Labour government pledged to restore the original 2030 deadline.

The industry faces pressures from a lack of EV take-up.

According to the industry group Society of Motor Manufacturers and Traders (SMMT), the “market demand for EVs remains weak” after recent numbers revealed that they accounted for 18.7 percent of the UK car market this year, below the 22 percent threshold set by the mandate.

SMMT Chief Executive Mike Hawes said on Dec. 24 that the rules had cost “manufacturers in excess of £4 billion in discounting in the UK this year alone.”

The industry also faces growing pressure from cheaper Chinese-made EVs.

European Union

European automakers recently floated the idea of raising prices on combustion-engine cars as EU penalties related to net-zero carbon dioxide (CO2) emissions are set to take effect in the new year.

From Jan. 1, the EU-wide targets will require a 15 percent emission reduction from new cars and vans, with industry estimates suggesting that about 22 percent of new car sales may need to be electric to reach those targets.

On Dec. 19, the European Automobile Manufacturers Association (ACEA) said that electric vehicle sales are “currently stagnating at around 13% market share; or 10 percentage points below where they need to be, and this gap is too large to close on time.”

A new electric van at Stellantis Vauxhall's plant in Ellesmere Port, Cheshire, England, on July 6, 2023. Peter Byrne/PA

It said the auto industry risks losing up to “€16 billion [$16.6 billion] in investment capacity by either paying penalties, reducing production, pooling with foreign competitors or selling electric vehicles at a loss.”

ACEA president and Renault Group CEO Luca de Meo said in a Dec. 22 statement that the “honest assessment must be that the transition is not going to plan and that sticking to legal rigidity leads to potentially irreversible damage.”

Volkswagen electric cars are parked in a storage tower in Dresden, Germany, on June 8, 2021. Sean Gallup/Getty Images

‘Artificial Price Increases’

Richard Gaul, the former head of communications at BMW for 22 years, told The Epoch Times by email that he believed that EU regulations are “fundamentally not sensible.”

“They are unlikely to lead to a significant reduction in CO₂ emissions and will simply cost the industry a lot of money,” he said. “Artificial price increases are never advisable. Prices are determined by the market, and if individual manufacturers raise their prices, new competitors would fill the gaps.”

Earlier this month, the center-right European People’s Party (EPP), which bills itself as the “largest and oldest group in the European Parliament” and is affiliated with European Commission President Ursula Von der Leyen, launched a campaign to change the car CO2 rules.

Gaul said he believed that it is becoming increasingly likely that these regulations will be modified.

“The EU also has a vital interest in maintaining a healthy and profitable industry in Europe, not least for its tax revenues,” he said.

He said that the environmental goals could potentially be achieved more effectively through alternative measures.

‘A Development No European Politician Would Want to See’

Despite growing pressure from cheaper Chinese EVs, he said that the industry would adapt, though this could mean a manufacturing shift away from Europe.

“The European automotive industry (not just in Germany) has historically adapted to new frameworks repeatedly. There’s little need to worry about ’the European automotive industry‘ as a whole, but concerns about ’the automotive industry in Europe’ are valid,” he said.

He said that there is a risk that manufacturers could relocate their production facilities to regions with more favorable conditions, such as lower energy costs, either within Europe or outside it.

“The vehicles would still bear the familiar logos of well-known brands, but they might be produced in factories no longer located in Europe,” he said. “This is a development no European politician would want to see. It’s worth noting that similar situations exist in other industries: for example, Apple designs its smartphones in its California offices, but all devices are manufactured in Asia.”