Government promises to rethink sales targets for electric cars

There are good reasons to believe that Stellantis was always going to close its factory in Luton and that there was very little the Government could have done to persuade the company to keep it open.
Business Secretary Jonathan Reynolds said as much in the Commons earlier.
But he also recognised that government policy is causing problems.
As things stand, carmakers say they are having to sell electric vehicles at a loss in the UK because consumers aren’t willing or able to pay a higher price for them.
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They also say they are restricting sales of petrol and diesel vehicles – which are profitable – in order to comply with a requirement to ensure that 22% (1 in 5) of new cars sold in 2024 are battery powered.
As we reported on Tuesday, the likes of Ford, Nissan, Toyota, Renault, VW and Jaguar Land Rover are set to miss this target.
The Society of Motor Manufacturers and Traders (SMMT) said these companies and others face the prospect of either paying £1.8 billion in fines to government or buying credits from their competitors who have complied.
The latter outcome would in some cases mean manufacturers based in the UK handing large sums of money to companies like Tesla, BYD and MG that produce cars in China.
ITV News’ Business and Economics Editor Joel Hills has the latest on news Vauxhall will close its 120-year-old Luton plant
The economics and the politics of this is extraordinary.
Reynolds points out that “Low Emissions Vehicles Mandate” was dreamed up by the previous government and he has expressed a willingness to change it.
But he hasn’t said how.
He says there will be a “fast-track consultation” ands it will also look at Labour’s manifesto promise to bring forward a ban on the sale of new petrol and diesel to 2030.
That date won’t change but the government might decide to allow companies to include sales of hybrids and plug-in hybrids in their “electric vehicles” allowance.
It may also decide to reduce or even waive the penalties, which don’t have to be paid until September next year but will crystallise as a liability on company balance sheets in four weeks time.
The industry emphasises the need for urgent action.
The SMMT chief executive, Mike Hawes, said “profitability and viability are in jeopardy and jobs are on the line.”
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