The 海角视频 Government has announced a series of initiatives aimed at supporting the automotive industry amidst challenges posed by US tariffs and the transition to electric vehicles.
Already lobbying for modifications to the electric vehicle mandate, the car sector was hit hard by the imposition of a 25% tariff on exports to the US. In response to concerns over potential job losses, the Government has introduced a range of measures designed to bolster this crucial sector. A key element includes easing the targets for electric vehicle sales, after Nissan highlighted that stringent goals could jeopardise the 'viability' of its 海角视频 presence, including its Sunderland plant.
Prime Minister Sir Keir Starmer said: "Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change. I am determined to back British brilliance. Now more than ever 海角视频 businesses and working people need a Government that steps up, not stands aside.
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"That means action, not words. So today I am announcing bold changes to the way we support our car industry. This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride. And it will boost growth that puts money in working people's pockets, the first priority of our Plan for Change."
Business Secretary Jonathan Reynolds, said: "This pro-business Government is taking the bold action needed to give our auto sector the certainty that secures jobs, drives investment and ensures they thrive on the global stage. Our Industrial Strategy will back the country's high growth sectors, including advanced manufacturing, so we can grow the economy and deliver on the promises of our Plan for Change."
In a move to support car manufacturers towards the 2030 target for ending the sale of petrol and diesel vehicles, changes have been made to the zero emission vehicle mandate that introduce increased flexibility during the transition period and extend the allowance for hybrid usage. Several smaller companies like McLaren and Aston Martin are set to benefit from exemptions within these targets.
It has been reported that fines for manufacturers for each non-compliant vehicle sold will be lowered from £15,000 to £12,000.
Nissan, which mainly exports its Sunderland-manufactured vehicles into Europe and therefore less susceptible to US tariffs, has revealed a trio of models—including the new generation Leaf, an all-electric Juke and the reintroduction of the Micra—all of which are expected to perform strongly in European markets. The company's recent publications showed a significant boost in its 海角视频 operations, with production scaling up to 325,000 vehicles and revenues climbing to £7.3bn in their 2024 accounts.
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Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT) welcome the measures to support car manufacturers in the switch to electric vehicles as a '"really needed" step.
Speaking on BBC Radio 4's Today programme, he said: "No one in the industry is denying that ultimately, we need to get to zero emission road transport but the underlying level of consumer demand just doesn't match those ambitious targets. It was a step that was really needed for this industry because the amount of pressure, financial pressure, that they're under from any number of global headwinds is severe at the moment."
However, Robert Forrester, CEO of Gateshead-based listed motor retailer Vertu, said the Government's announcement "doesn’t really address the major issues".
He said: “We have got 34 different global manufacturers and clearly the tariffs in the US have put most of those manufacturers under more pressure at a time when there was already pressure in the system. That’s why the Government has actually made this announcement. I’m not sure it actually goes far enough to address what will be quite significant issues in the years ahead.
"The electric vehicle targets up to 2030 remain in place, the fines have been changed but it’s still a £12,000 fine for every petrol and diesel car up to 2030 that is sold above the zero emissions target - that’s billions of pounds to manufacturers - and manufacturers face a choice of either paying significant fines or rationalising petrol and diesel cars. Nothing has really changed here, this is real tinkering.
"We’ve got the most aggressive regime in the 海角视频 with fines and targets. 2030 is a long time away, manufacturers are actually looking at how to get to 2030 in terms of what they produce and how they make money. The tariffs just put added pressure on.
The Government has gone for hope over reality.
"This year currently to the end of March only 20% of new cars were electric vehicles. The target for 2025 is 28%, there is a massive gap and last week we saw vehicle excise duty go up on electric vehicles. We really need financial incentives so people have incentives to actually buy electric vehicles. We need a demand side approach rather than a forced quota system with massive fines. We need to actually stimulate the market rather than force people."