Nissan is warning that the UK automotive industry is facing a critical situation, with jobs and the sector’s competitiveness in jeopardy unless the government adjusts its electric vehicle (EV) sales targets. For the first ten months of 2024, EVs accounted for only 18% of new car sales in the UK, which is below the 22% threshold set by the government’s quota system.
Manufacturers can purchase credits from EV producers like Tesla to meet these targets. However, next year’s planned increase to a 28% minimum target is seen as unrealistic, particularly with declining consumer demand, leaving carmakers vulnerable to significant fines of £15,000 per vehicle if they fail to comply.
Nissan and other automakers argue that the pace of EV adoption is slower than anticipated, which threatens not only their ability to meet government targets but also the wider automotive sector. If the government doesn’t act soon, Nissan warns that the consequences could include job losses and harm to the UK’s economic growth.
With the 28% target looming, manufacturers are growing increasingly concerned that the regulations could become financially damaging. Nissan is prepared to escalate the issue, potentially appealing directly to opposition leader Sir Keir Starmer if discussions with the transport department fail to result in meaningful change.
The Department for Transport (DfT) maintains that it is working closely with Nissan and other manufacturers, emphasizing that it has already introduced flexibilities to help companies meet the EV quotas. Additionally, the government points to over £300 million allocated in the Budget to support the transition to EVs, along with a £2 billion commitment to bolster automotive manufacturing in the UK.
However, manufacturers feel that their concerns are being dismissed, with some describing the DfT as “tone deaf” in its response. There is frustration over the lack of one-on-one meetings with transport officials, further exacerbating tensions within the industry.
Nissan’s concerns are not limited to the UK market. The company is grappling with global challenges, including stagnating growth in EV sales, an outdated product lineup, and shrinking demand in China. These factors have led to emergency measures, including the loss of 9,000 jobs. On top of this, Nissan is worried about increased competition from Chinese automakers, which could become more difficult to counter if stricter emission penalties are imposed by the UK and EU. The company fears that higher compliance costs in these markets could further erode its competitiveness.
The UK’s zero-emission vehicle (ZEV) mandate requires all new cars to be fully electric by 2035, but the government has accelerated this plan by aiming to ban new petrol and diesel vehicles by 2030, with some exceptions for hybrids until 2035. While EV sales in the UK have seen a 25% rise year-on-year in October, industry leaders argue that the increasing sales targets will be difficult to meet, especially with the 28% target set for next year.
There is disagreement among carmakers about how the government should adjust its approach, with some calling for a pause in the ZEV mandate, others advocating for smaller fines, and some requesting more subsidies to boost consumer demand. Environmental groups, however, insist that the targets should remain as they are, noting that manufacturers can still meet them by purchasing credits and cutting their overall carbon emissions.