This post is by Ralph Palmer who leads Transport & Environment’s UK work on electric vehicles.
There was celebration when the government followed its decision to ban the internal combustion engine by 2030 with a commitment to a Zero Emission Vehicle (ZEV) mandate. Inspired by a similar Californian regulation, this sets yearly targets for manufacturers to increase the percentage of ZEVs they sell from 2024 until 2035. It’s an important policy to address one of the big issues around the switch to battery electric vehicles (BEVs) transition, and that is supply.
It was hailed as an enormous step and promised to be an ambitious, world leading piece of legislation. But, as always, the devil is in the detail. The proposals so far are a let down. But there’s still time for the government to step up: higher targets in the early years will be crucial for the triple win of boosting energy security, attracting additional investment and jobs, and reducing transport emissions.
The proposals are woefully unambitious
Although the UK is regarded as a global leader on ZEVs, the current mandate falls well short of ‘leadership’. Specifically, the proposals for 22 per cent for cars and eight per cent for vans to be battery electric in 2024 are below where the current market trajectory will get us anyway. This simply isn’t good enough for a policy that is supposed to drive the market faster.
In 2022, BEVs already make up 14 per cent of new cars, nearly double the number last year, while BEV van sales are up to five per cent, more than double than last year. Expect this trend to continue: like a Tesla Roadster, the electric transition is accelerating at tremendous speed.
An ambitious 2024 target for cars, therefore, would be 33 per cent. Anything under 25 per cent is completely inadequate. Similarly for vans, anything below ten per cent would be woeful. The target level for vans should be 15 per cent. Not only would the 33 per cent and 15 per cent targets be ambitious, they are also both completely realistic. In fact, 33 per cent for cars is within the higher end of the automotive trade body SMMT’s range of scenarios.
Faster progress will cut driving costs and increase energy security
The UK is a net importer of diesel and will be a net importer of petrol sometime in the 2020s. This means that, as a nation, we are increasingly reliant on foreign energy supplies. Against the backdrop of the government’s commitment to phase out Russian oil imports, a faster switch to BEVs is an effective way of shoring up Britain’s energy security.
BEV cars and vans are already far cheaper to run than their polluting predecessors. While prices at the petrol pumps are soaring, BEV drivers are benefiting from much lower fuel (and maintenance) costs. Accelerating the electric van transition creates a double win by not only reducing costs to many small businesses, but also by reducing overall UK diesel demand, which is crucial when you consider that just under a fifth of UK diesel comes from Russia.
There are other benefits too. The higher the early targets, the faster the UK can create a thriving second hand BEV market, unlocking the potential for millions of drivers to benefit from far cheaper running costs. Targets that increase supply and competition in the early years will also help to reduce prices faster.
It’s a chance to be world class
Additionally, setting ambitious ZEV mandate targets (accompanied by high penalties for non-compliance) would mean manufacturers will have to prioritise the UK market for ZEV production and sales. This could boost UK manufacturing and jobs. We have already seen the Stellantis Ellesmere Port site switch to an all-electric facility, and it is entirely possible other foreign direct investment would be attracted to the UK through the ZEV mandate.
Plans are for the final proposals of the ZEV mandate to be set out later this year. Anything but a significant rise in ambition will be a failure to capitalise on the momentum to accelerate the move to fully electric vehicles.
With the Climate Change Committee’s recent progress report showing that the UK is failing to meet its climate targets, the mandate presents a golden opportunity to be top of the class globally, for zero emission vehicles at least.