Industry reacts to 2030 new car and van fossil fuel ban delay

The Government's decision to delay the introduction of its ban on the sale of new internal combustion engine (ICE) cars and vans by five years has been welcomed by some, met with disbelief by others and criticised by many.

Three years after it announced that new internal combustion engine (ICE) cars and vans would not be allowed to be sold in the UK from 2030, the Prime Minister, Rishi Sunak, has now decided to delay the ban by five years, with a new start date of 2035. Read the full story here.

Gerry Keaney, BVRLA chief executive, said that the announcement will “frustrate many while offering relief to others”. 

“Those that have made huge financial and strategic investments in this technology and mobilised their customers and workforces for decarbonisation will be worried that Government is applying the brakes,” he added. 

“Others will be grateful for the extra breathing space this delay provides. They will be hoping that it gives more time for costs to come down and consumer attitudes to change. 

“We await the further details that will show the true impact of today’s announcement. It is important that progress isn’t paused and momentum can be maintained.

“Either way, everyone is likely to have less trust in the Government’s net zero strategy and will think a lot harder before committing to any of its future strategies or roadmaps.” 

Paul Hollick, chair of the Association of Fleet Professionals (AFP), also acknowledged that some would welcome the move, while others do not.

“While some of our members will be pleased about this because it takes the pressure to electrify away for the time being, the reaction that we are seeing across the fleet sector to this news is largely negative,” he said.

“The motor industry and their fleet customers have invested billions towards meeting the 2030 electrification deadline and while there are serious operational issues that need to be tackled, especially when it comes to electric vans, the assumption within our membership was that the government would need to provide more support, not move the goalposts.

“Where we go from here is difficult to say. The global motor industry doesn’t hinge on what the UK government does, so this is unlikely to do much to change future production plans away from electric vehicles towards petrol and diesel while presumably, company car benefit in kind taxation will stay in its current form and continue to encourage fleets to electrify.

“In 2030, the vast majority of new cars on sale in the UK, and a substantial element of the used car parc, will almost certainly be battery powered.

“The overwhelming feeling is probably one of irritation. Fleets have done some incredible work when it comes to electrification and it feels as though the can has been kicked down the road in a fairly arbitrary fashion by a Government that sees this move as politically expedient.

“There are, of course, a range of dangers. The value of existing EVs may be negatively affected; investment in charging infrastructure may fall away; and there may just be something of a ‘manyana’ environment around electrification for the next few years.

“However, this must be resisted and it is especially important the local authorities are properly funded to ensure the installation of on-street chargers becomes widespread.”

David Wells, chief executive of business group Logistics UK, believes that pushing back the deadlines to decarbonise is “unhelpful” and will “discourage private investment” in the UK.

“There is still much to be done, from delivering a charging network to confirming plans for alternatively fuelled vehicles, but our industry remains committed to achieving net zero,” he said.

“As a sector, logistics works hard to deliver on time for all sectors of the economy – if new decarbonisation deadlines are to be achieved, it is vital for the health of the UK’s supply chain, and therefore our economy, that the Government does the same.

“At a time when industry needs detail and action, delay just creates more uncertainty.”

RAC head of policy Simon Williams argues that the announcement risks slowing down both the momentum the motor industry has built up in switching to electric powertrains and ultimately the uptake of EVs.

However, he said: “As cost remains one the biggest barriers to going electric, there’s surely no reason why the Government can’t help many more drivers into EVs by reintroducing a form of the plug-in car grant that incentivises the cheaper end of the car market.

“At the same time, we strongly hope manufacturers will continue producing EVs in ever increasing numbers as this is ultimately what’s needed to help bring prices down for both new and second-hand cars.”

He continued: “It’s also not at all clear how rolling back from 2030 is compatible with the Government’s zero-emission vehicle mandate which was due to set targets for manufacturers’ EV sales from next year. It’s perhaps telling that ministers have yet to respond to the consultation on this that closed in May.”

Tim Buchan, chief executive at Zenith, said: “As a business with 170,000 vehicles under management and a vision to eliminate tailpipe emissions, we are surprised by the Government’s decision to delay the 2030 deadline, especially after the reassurances provided in recent months.

“The automotive sector has been aligning its efforts with this deadline since its announcement three years ago and this proactive stance has set in motion substantial investments and strategic shifts across the industry, driving the market towards better infrastructure to support drivers and a cleaner, healthier Britain.

“The industry requires clarity and consistency to allow decisions and investments to be made and scale will be important to make battery electric vehicles affordable for everybody.”

Philip Nothard, insight and strategy director at Cox Automotive, also says what’s now vital is that the Government sticks to its pledges and does not move any other goalposts.

“The automotive sector – and consumers – need clarity and certainty,” he said.

“The Government must not lose sight of the now urgent requirements for significant investment in EV infrastructure and incentives to support private buyers with the transition to new and used electric vehicles. Otherwise, in five years' time, we risk being in the same position we face today.”

Liam Griffin, CEO at Addison Lee, believes the delay is bad news for fleet operators. "Where charging providers once had confidence that a 2030 ban meant a guaranteed increase in the number of electric vehicles on the road – and therefore a greater need for charging provision across the city – they no longer have this assurance, putting the roll-out of further infrastructure at risk," he said.

"Pulling back on the 2030 commitment reduces the ability of operators to confidently invest in the transition.

"Similarly, in London, the removal of financial incentives - such as the electric vehicle exemptions within London’s Congestion Zone - will deter many from moving to EVs and slow the reduction of air pollution across the capital."

Lauren Pamma, director of transport programmes at the Green Finance Institute, added: “Policy stability and certainty around the 2030 ban has set the direction of travel, resulting in billions of public and private capital being mobilised for the EV transition.

“Rowing back on this commitment and extending the mandate risks damaging the UK’s international investment credibility and seeing investors leave for markets with more certainty.

“If we want to make the EV transition affordable and accessible, we need to create the appropriate policy and investment environment to ensure the supportive supply chain and enabling infrastructure, such as grid capacity, are in place.”

Cara Haffey, head of automotive at PwC UK, agreed. She said: "The extension of the date of the ban on selling new petrol and diesel vehicles until 2035 will have an end-to-end impact on the automotive industry.

“Manufacturers will have already begun adjusting the direction of their investment with the initial 2030 deadline in mind, it will be interesting to see if this extension will now lead to reallocation of capital to other areas. 

"Separately, this could lead to a dampening of EV demand by consumers. Our latest eReadiness report showed consumer demand has fallen in the UK market compared to last year, and with an extension confirmed - consumers may look to postpone their EV transition plans.

“The possible impact on the roll-out of vital EV infrastructure such as charging networks, is key, as this is only incentivized for developers if there is adequate consumer demand to meet the required deployment of capital."

Maria Bengtsson, EY’s UK electric vehicle lead, added: “The delay to the 2030 ban on the sale of new internal combustion engine vehicles could cause significant disruption for the automotive sector including original equipment manufacturers, dealers, businesses and consumers, given the extensive preparations made across the industry for the original deadline.

“It may also risk a loss of momentum just as the industry was preparing for the next phase of the EV transition, moving out of the early adoption phase and into a pursuit of mass market uptake.”

Richard Peberdy, UK head of automotive for KPMG, believes that the 2030 deadline gave the industry certainty on which to invest, which was supported by consumer and industrial strategy. 

“Car manufacturers subsequently invested billions of pounds in new electric vehicles, their control systems and the battery technology and production required to support them,” he explained. 

“At the same time, they are having to support and fund a declining supply chain for internal combustion engine vehicles, which will become more costly and complex to secure over time.

“Whilst delaying this deadline allows for more time for transition to electric vehicles and investment to be made in related infrastructure, we have already seen that big concerns are being raised by some of the automotive industry about the impact of this decision on investment plans, the consumer desire to transition to EVs, and the certainty that business can have in the new deadline.” 

Ben Nelmes, CEO of New AutoMotive, added:“Pushing the ban on buying petrol and diesel cars back to 2035 is an abdication of leadership that motorists will pay the price for.

“It sets us back in the global race to develop green industries - a huge own goal by the UK.

“It’s also a hammer blow to the UK’s leadership on climate change. Despite what the Prime Minister has claimed, it will be harder to meet our legally binding emissions targets.

“He is right to say that electric car prices are dropping and charging infrastructure is improving – but this is thanks to the industry investing billions of pounds working towards the 2030 target.

“Pushing the date back will raise costs for motorists by deterring future investment in the UK EV industry and supply chain.

“It will restrict job creation, weaken energy security and lead to higher energy bills for longer for everyone. It removes a key pillar of the current government industrial policy of green growth, reversing the work of the last decade.”

Asif Ghafoor, CEO and co-founder of Northern charging network Be.EV, continued: “You can’t help but think the Prime Minister looked at the net zero plan and thought ‘that’s going to be a bit hard’, so chose to abandon it.

“The cold reality is Sunak needed to face up to the challenge - and to do so with conviction. The world is going through a major industrial shift - no one ever said it was going to be easy.

“At such an important time, the government should be leading the charge, creating jobs and opportunities and attracting investment to this country.

“Instead, they are changing dates, generating uncertainty and demonstrating a total lack of ambition and courage in their vision for the country’s green future.”

Tom Hurst, UK country manager at Fastned, explained: “Cleaner transport isn’t just important for meeting the existential threat posed by climate change, but more immediately poor air quality is costing lives today.

“From being at the vanguard of the EV revolution, the UK risks becoming a dumping ground for polluting vehicles from elsewhere.

“It’s especially puzzling given the fierce global race for green investment that the UK is already trying to compete in.

“Targets help secure investment, and as the UK lead of a European company with millions to invest in charging infrastructure it’s frustrating that in addition to byzantine planning rules and red tape for grid connections, there is now another hurdle in the way.”

Steve Nash, CEO of the Institute of the Motor Industry (IMI), believes that there is now a serious risk that businesses and individuals will take their foot off the pedal and the investment in EV skills will lose momentum.

“The deadline shift also demonstrates a distinct lack of understanding of the pressures a multi-technology vehicle parc places on the automotive workforce," he said.

“The upskilling that has already taken place has come at a financial strain which businesses and individuals have justified because of the expected increased EV adoption.

"Even if EV uptake slows over the next few years, there will still need to be a concerted focus on upskilling to meet the needs of the growing parc as well as other emerging technologies such as connected and autonomous.

"However, with the ICE vehicle parc not diminishing as had been previously expected, the skills to work on petrol and diesel vehicles will also need to be maintained. And this multi-technology pressure could undermine access to competent and fairly priced aftermarket services as a whole, not only threatening road safety in general but hitting those struggling with cost of living pressures hardest – the very group the Government’s announcement is allegedly designed to help.

“It is absolutely crucial that the shift to 2035 is not seen as a ‘free pass’ to delay investment in infrastructure and training.

"Therefore, having made this change, the Government must now understand the multiple challenges the sector faces and provide the right support to ensure the UK economy and wider society can continue to rely on the automotive sector.

“We look forward to working with Government to inform and understand how this can be achieved.”

CEO of EO Charging, Charlie Jardine, says that "huge strides" have been made in recent years to electrify vehicles for individuals, commercial van fleets and public transport despite the "historic lack of critical planning" from the Government.

"A clear target has motivated and enabled businesses to raise investment and develop and build new products that are critical to drive net zero," he continued.

"Uncertainty and change in policy will only serve to slow or even reverse this progress hindering the development of the green economy.

"This is an unnecessary delay to reducing emissions and fails to capitalise on the world leading work to decarbonise UK electricity generation.

"We would urge that the 2030 deadline remains in place, global warming isn’t slowing down neither should the push to fight against it.

"Despite this change in policy, we will continue to work with our industry and financial partners to ensure that the roll out continues at the current pace.”

Ashley Tate, MD of Allstar Chargepass UK, believes that the lack of certainty is unsettling for businesses, but asks whether it will it really change the course of the transition? "We don’t think so," he said. 

"The shift to EVs is happening whether we like it or not – there will be lots of twists and turns ahead, not to mention the upcoming general election next year. But none of this will deter the industry

“Car manufacturers are already committed to 2030 deadlines, most have changed their production lines and business models and have plans to stop manufacturing ICE vehicles.

"Ford has come out stating it’s keeping on track. UK businesses are demonstrating their commitment and the majority of car manufacturers are equally taking the role to net zero seriously.

"Not only that, they understand the role they play in meeting increased demand for EVs – the consumer shift is already happening so this will continue to influence things in more ways than one.

“The BIK benefit is the main driver behind EV adoption amongst company car drivers, regardless of what the Government does with the deadline, businesses are pushing ahead.

"There's more preference for EVs than ever before, and as a company helping to spearhead the EV transition in fleets, we'll continue to serve that demand.”