Ford calls for incentives to buy electric cars as backlash grows

Ford UK has called on the government to introduce incentives to encourage drivers to buy electric vehicles (EVs) as an industry backlash grows over sales targets.

Lisa Brankin, Ford UK’s chair and managing director, told the BBC that without demand a government mandate to produce and sell more EVs “just doesn’t work”.

The comments add to a growing row between the government and the industry over the targets which firms say are too high for current EV demand.

The government has said it will launch a consultation on the targets but remains “absolutely committed” to a deadline to phase-out sales of new petrol and diesel cars by 2030.

Ford is one of a number of vehicle-makers which are cutting jobs in the UK, due in part to the EV targets.

Last week, it announced it will cut 800 jobs in the UK over the next three years.

Meanwhile, on Tuesday, Stellantis, the owner of Vauxhall, said it would close a plant in Luton, putting 1,100 jobs at risk.

Ms Brankin told BBC Radio 4’s Today programme: “The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.”

She said Ford has invested “significantly” in the production and development of EVs, with “well over” £350m put into electrification in the UK.

“So we kind of need to make it work,” she said.

At the Society of Motor Manufacturers & Traders (SMMT) industry group’s annual dinner on Tuesday, Business Secretary Jonathan Reynolds confirmed the government would consult on the EV targets.

“We get it. We get the seriousness of the situation and we get the urgency,” he said.

However, he added the government is “absolutely committed to our manifesto commitment of a 2030 phase-out for new cars powered solely by internal combustion engines”.

Under the current mandate, a percentage of the cars that companies sell must qualify as zero-emission.

EVs must make up 22% of a company’s car sales and 10% of its van sales this year.

For every car sale outside of that, firms must pay a £15,000 fine.

That target is set to rise to 28% for cars and 16% for vans in 2025. The rules will then get tougher every year ahead of a complete ban of new petrol and diesel car sales.

The previous Conservative government moved the target for the phase out from 2030 to 2035 last September, but Labour has said it intends to reinstate the 2030 deadline as part of its wider commitments to climate change policy.

There are flexibilities in the system, allowing manufacturers that can’t meet the targets to buy “credits” from those that can.

In practice, this means buying credits from companies such as Tesla or Chinese firm BYD, which build electric models exclusively.

Manufacturers argue that demand for electric cars has not been as high as was expected when the rules were drawn up.

As a result, to avoid fines, they say they are having to discount new vehicles heavily, or subsidise rivals that build electric cars only, none of whom have a manufacturing base in the UK.

Sales of electric cars have been increasing. In October, they made up one out of every five cars registered. However, industry sources insist this is largely down to unsustainable discounting.

Reynolds told the SMMT audience he is “profoundly concerned” about the way zero emissions policies currently operate.

“I’m going to be frank with you. I don’t believe the policies that we have inherited, and I mean specifically in relation to zero emission vehicles, are operating today in a way anyone intended them to,” he said.

“In fact, I am profoundly concerned by how that is working at the moment.”

He said: “We know you need certainty and that’s why we will fast track that consultation, giving you clarity on the direction of travel and ensuring you have the answers you need in the coming weeks.”

The SMMT has called for urgent government intervention to safeguard the sector, warning that weak demand for electric cars and the requirement to fulfil sales quotas had ” the potential for devastating impacts on business viability and jobs”.

At a meeting last week with Reynolds and Transport Secretary Louise Haigh, car firms called for more flexibility to be built into the regulations.

Nissan, which builds EVs at its plant in Sunderland, has said the rules are “undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment”.

A number of options have been suggested to change the EV sales rules, including allowing sales credits to be transferred between cars and vans, giving credit for British-made EVs sold abroad, or new incentives to encourage private buyers to choose EVs.

In its manifesto, Labour insisted it would bring forward the target date for ending sales of new petrol and diesel cars to 2030. It is understood that target is still seen as non-negotiable, and the annual quotas will not be changed.