Britain’s car industry is in crisis due to a lack of demand for electric cars, the boss of Ford’s UK arm has warned.
Lisa Brankin, the chairman and managing director of Ford UK, called for the Government to urgently introduce ‘incentives’ such as tax breaks to convince drivers to switch away from petrol and diesel.
It came after Business Secretary Jonathan Reynolds told carmakers he was ‘profoundly concerned’ about how policies meant to phase out new petrol and diesel vehicles by 2030 were operating, and would consult on ‘a better way forward’ while still keeping the target.
Sir Keir Starmer was challenged at Prime Minister’s Questions about the potential job losses caused by Vauxhall owner Stellantis saying it would close its van-making plant in Luton.
Conservative Party leader Kemi Badenoch suggested Sir Keir ‘doesn’t seem to care’ about young people who will ‘lose their jobs as a result of his Budget’.
She added in the Commons: ‘Perhaps he can show more concern for the 1,100 people who found out yesterday that they could lose their jobs at Vauxhall’s plant in Luton.
‘So while he flies around making unilateral commitments, back home the real world effects are businesses closing in Bedfordshire and Basildon. Does the Prime Minister stand by his promise to ban the sale of petrol cars by 2030 even if more jobs will be lost?’
Sir Keir replied: ‘The question of the position of jobs in Luton is a very serious one and families and workers will be very worried and we’re obviously engaging with them.
‘I would remind the leader of the Opposition that the EV (electric vehicle) mandates that are an issue in this particular case were actually introduced by the last government.
‘I would also remind her that she was the business secretary that introduced them. We’re getting on with supporting those communities, she’s shouting from the sidelines.’
Mrs Badenoch countered: ‘He clearly didn’t read his briefing about the EV mandate. The fact is we changed the date and made it easier for people. Everything he has done is attack people.’
Ms Brankin told BBC Radio 4’s Today programme that the government-backed incentives were needed ‘urgently boost the uptake of electric vehicles’ in order to hit its targets.
She said Ford has invested ‘significantly’ in the production and development of EVs, with ‘well over’ £350million invested around electrification in the UK, adding: ‘So we kind of need to make it work.’
Asked whether she is happy for the Government to stick to the targets around EVs and ending production of diesel and petrol cars as long as they help persuade customers to buy electric vehicles, Ms Brankin said: ‘Yes, I think so.’
‘As an industry we have repeatedly said that we support the Government’s trajectory and we support the ambition that the Government has set out, it’s just that there isn’t customer demand.’
Chancellor Rachel Reeves said the government would ensure ‘proper support’ for the car industry as it phases out sales of new petrol and diesel vehicles.
‘We are committed to the 2030 target for phasing out the purchase of new petrol and diesel cars, but it is really important within that to make sure that we get the balance right and have proper support for the automotive sector, for the car industry in Britain’, Reeves told broadcasters.
‘We have just launched a consultation to look at the plans that we inherited from the previous government which would have meant fines for businesses that didn’t sell a proportion of electric vehicles, because we want to keep investment, we want to keep jobs in Britain.’
The Society of Motor Manufacturers and Traders has warned the pace of the transition could hit carmakers as demand for zero-emission vehicles ‘failed to meet ambition.’
Under the zero-emission vehicles (Zev) mandate, at least 22 per cent of new cars sold by each manufacturer in the UK this year must be zero-emission, with the threshold rising each year.
The mandate as it stands sets out a target to reach 80 per cent by 2030, but the Government has committed to bringing the ban on the sale of new petrol and diesel cars and vans forward from 2035 to 2030, reversing a change introduced by Rishi Sunak’s government last year.
The consultation is not expected to result in changes to the Zev mandate’s percentages but could include amendments to the options for how manufacturers who miss their targets can avoid being fined.