Over the past few weeks, the UK’s ruling Conservative Party has positioned itself firmly as the party of petrol, with Prime Minister Rishi Sunak ordering a review into low-traffic neighbourhoods in an apparent bid to appeal to motorists following his party’s recent Uxbridge by-election win – in large part fought in opposition to the expansion of London’s Ultra Low Emission Zone. Last week, Business Secretary Kemi Badenoch pushed back against the UK’s zero-emission vehicle (ZEV) mandates, suggesting they could stifle investment and lead to British job losses.
Yet some experts claim that the UK’s relative success when it comes to adopting electric vehicles (EVs) means that Britain stands to lose investment should it not keep up with other countries’ EV targets.
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According to the most recent data for 2023 from the European Automobile Manufacturers’ Association (ACEA), the UK is among the top ten EU countries (including the UK) for EVs as a share of total new car sales, with battery electric vehicles (BEVs) accounting for 16.1% of such sales between January and June of this year. As such, the UK is currently running ahead of other major economies such as Germany and France.
Through June of this year, 152,965 new BEVs were registered in Britain, according to ACEA, representing a 32% growth compared with the first two quarters of 2022.
According to separate research published in June by British non-profit the Energy and Climate Intelligence Unit (ECIU), the fact that the UK exports more than half of the cars it builds – to one of three markets that have set targets for “heavily restrict[ing]” the sale of petrol and diesel vehicles – means it would be financially prudent for the UK to ensure that it develops, rather than restricts, its own EV manufacturing base. According to the ECIU, 80% of all cars manufactured in the UK are exported, of which 57% goes to the EU, 8% goes to China and the remaining 5% to the US, which has recently become a serious competitor in the global EV race.
The ECIU's report concludes that “if the UK fails to respond and develop” its EV manufacturing base further, in light of these three countries' 2030 EV policies, a “conservative scenario” sees the value of UK car exports by 2030 falling by a cumulative £13.2bn ($16.8bn) – £10.9bn to the EU, more than £1.45bn to China and more than £917m across 16 US states. According to the ECIU, this would represent a 59% decline in car export revenue.
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By GlobalDataThe UK’s existing target will require car manufacturers to ensure at least 22% of new sales in the UK come from ZEVs, rising each year to reach 80% by 2030 and 100% by 2035, facing a potential penalty of £15,000 for every car sold that does not comply.
Although Badenoch has voiced industry concerns that this target is too stringent, data from the UK Climate Change Committee’s 2023 Progress Report to Parliament shows the UK is in fact already on track to exceed this goal, meaning any weakening of the UK’s ZEV target would represent a decline in sales growth seen to date.
With the UK’s EV market currently thriving, government plans to slow the market transition on the grounds of saving jobs and potential investment could, conversely, mean the UK loses its footing in the lucrative global race for EV dominance.
