Ford calls for incentives to buy electric cars as backlash mounts

Ford UK is calling on the government to introduce incentives to encourage drivers to buy electric vehicles (EVs) as the industry backlashes over sales targets.

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

The comments add to the dispute between the government and the industry over the sale of new petrol and diesel cars that will take place over the next few years.

On Tuesday, Stellantis, the owner of Vauxhall, said it would close its plant in Lutonputting 1,100 jobs at risk, partly due to EV targets.

Business Secretary Jonathan Reynolds told the House of Commons on Wednesday Stellantis decision a “dark day for Luton”.

It joins Ford in axing UK jobs. Last week, that is announced it would cut 800 jobs in the UK over the next three yearspartly due to EV targets but also due to increased competition.

Ms Brankin told BBC Radio 4’s Today programme: “One thing we need is a government-backed incentive to quickly boost the use of electric vehicles.”

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

“So we have to do this,” he said.

Both companies have previously cast doubt on their future in the UK due to other factors, separate from their EV targets.

Ford to close Bridgend plant in 2020, cutting 1,644 jobs citing Covid-19 as one of the reasons when Former Vauxhall owners suggested in 2019 that Brexit threatened the Luton plant.

Meanwhile, some analysts say the shift toward luxury vehicles and away from cheaper models is also to blame for Ford’s woes.

Reynolds blamed the previous government for the closure of Luton Stellantis, saying Labor had “inherited a very frustrating position”.

He said there would be a “fast-track” consultation on how EV targets are implemented, but reiterated Labor’s commitment to a new phase of petrol and diesel sales by 2030.

However, shadow business secretary Andrew Griffith said the 2030 target was a “job killer” and the Stellantis decision was “a direct result of government policy that is not working for industry”.

The previous Conservative government Move the deadline for phase-out from 2030 to 2035but still the penalty for non-compliance.

According to the current mandate, a percentage of the cars sold by the company must have zero emissions.

EVs should make up 22% of company car sales and 10% of van sales this year.

For every car sold outside, the company must pay a fine of £15,000.

The target will rise to 28% for cars and 16% for vans by 2025. The rules will become tougher each year before banning the sale of new petrol and diesel cars.

Labor has said it wants to restore the 2030 target as part of a wider commitment to climate change policy, but will question how the “direction of travel” for the policy should be.

There is flexibility in the current system, allowing manufacturers who can’t meet their targets to buy “credits” from those who can.

In practice, this means that the company can buy credits from companies such as Tesla or the Chinese company BYD, which makes exclusively electric models.

Manufacturers say demand for electric cars is not what they expected when the rules were made.

As a result, to avoid fines, they say they will have to discount new vehicles, or subsidize rivals that only make electric cars, none of which have a manufacturing base in the UK.

However, sales of electric cars are increasing. In October, they made one out of every five cars registered. However, industry sources insist that this is due to unsustainable discounting.

Reynolds told an industry audience at a dinner hosted by the Society of Motor Manufacturers & Traders (SMMT) on Tuesday that he was “very concerned” about the way the current zero emissions policy was going.

“I don’t believe that the inherited policies, and I mean specifically those related to zero emission vehicles, are operating today in the way that anyone wants them to,” he said.

He and Transport Secretary Louise Haigh met car companies last week to discuss EV rules.

A number of options have been suggested, such as allowing sales credits to be transferred between cars and vans and offering “credits” for UK-made EVs sold abroad.

The SMMT is calling for urgent government intervention to safeguard the sector, warning that weak demand for electric cars and requirements to meet sales quotas have “the potential to damage business viability and employment”.

Nissan, which builds EVs at its factory in Sunderland, has said at the time the rules “damage the business case for car manufacturers in the UK, and the livelihoods of thousands of jobs and billions of pounds in investment”.