Key facts
- Britain's automotive industry faces significant risk from the government's ZEV mandate and EU tariffs.
- The ZEV mandate requires carmakers to sell a growing proportion of electric vehicles annually.
- Industry body SMMT warns the mandate is outpacing market demand and could lead to increased imports.
- Upcoming EU 'Made in Europe' rules threaten a 10% tariff on 70% of UK electrified vehicle exports.
- These tariffs could put £16.4bn of UK trade at risk, with a total tariff bill of £1.4bn.
The UK's automotive industry is facing a critical juncture, with warnings that it could be severely impacted by the government's Zero Emission Vehicle (ZEV) mandate and impending European Union tariffs. Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), stated that the ZEV mandate is advancing faster than natural market demand, potentially leading to a scenario where the UK meets its climate goals by importing electric vehicles, but at the expense of its domestic industry.
Hawes highlighted that the mandate, which requires 38% of car sales to be electric by the end of the year and over 52% by 2028, is financially unfeasible for many manufacturers. He expressed concern that this could result in a significant portion of EVs being bought from abroad to meet targets, making the domestic industry 'collateral damage'.
These concerns are amplified by the EU's 'Made in Europe' measures, set to take effect next year. These rules will grant preferential trading treatment to goods made predominantly in Europe. For the UK, this could mean a 10% tariff on approximately 70% of its electrified passenger vehicle exports to the EU, potentially jeopardizing £16.4 billion in trade and incurring a collective tariff bill of £1.4 billion. Hawes urged for urgent action and a joint solution to avoid these additional costs in an increasingly competitive global market.
The warnings come as several carmakers have recently scaled back or closed operations in Britain, with Stellantis citing central government policy for ending operations at its Luton plant. Jaguar Land Rover and Nissan are among those reported to have lobbied against the current EV targets.