The electric car revolution that’s running out of road: How Labour’s EV targets are putting jobs and investment at risk – as experts warn cheap Chinese imports could soon flood UK market

Labour has been accused of not doing enough to support car makers and encourage the uptake of electric cars since coming to power – putting jobs and investment at risk as Britain’s car market is flooded with cheap Chinese imports.

Experts including former Top Gear presenter Quentin Willson say the government needs to put more money into car chargers and even free parking in town centres if it is going to insist on car makers hitting tough sales targets on electric vehicles or else face fines.

The sales target, known as the zero emissions vehicle (ZEV) mandate, has been blamed by Vauxhall parent firm Stellantis as the reason behind its decision to close the Luton van plant next year, putting 1,100 jobs at risk.

Last night the government said it would re-evaluate how the mandate works but stopped short of promising to ease the targets, which currently require 22 per cent of all new car sales this year to be electric – the current figure is just 18.1 per cent.

But other executives, including Ford UK MD Lisa Brankin, has called for greater action by the government, including incentives such as tax breaks to convince drivers to switch away from petrol and diesel. 

Labour is set to roll back the date by which 100 per cent of cars sold must be zero emissions to 2030. This is five years earlier than the original mandate target set by Rishi Sunak‘s government – and a demand car makers say they can’t meet.

Academics say demand for EVs has ‘flatlined’ because of their huge upfront cost compared to petrol and diesel rivals and concerns over running out of battery – and that Labour is doing little to counteract these concerns.

Car makers also face stiff competition from Chinese brands such as BYD and the now Chinese-owned MG, which make very cheap electric cars at an unimaginable scale that could drive manufacturing out of Britain.

Half of all cars bought in China are electric – and the top brands are all Chinese. Buyers are also swayed with government grants, while UK electric car grants were scrapped in June 2022.

Do you work at the Stellantis Luton plant? Email: jon.brady@mailonline.co.uk 

Former Aston Martin boss Andy Palmer, who led the design of the electric Nissan Leaf hatchback, says car makers need to be given a ‘chance’ to catch up with the targets

Vauxhall parent company Stellantis says it will close the Luton plant next year – blaming the government’s tough ZEV mandate

Producing cars at that kind of scale makes them cheaper to build – spelling trouble for car firms already struggling to keep up with the government’s eco sales target. 

That could, in turn, see more decisions made like that by Stellantis yesterday – which came after multiple warnings from top brass to reconsider the ZEV mandate fell on deaf ears.

Shadow business secretary Andrew Griffith today called the factory closure a ‘downpayment on jobs’ and that the policy was ‘unworkable for this industry’, adding: ‘Stellantis told us as much when they said this decision was made in the context of the ZEV mandate.’ 

Dr Jonathan Owens, a senior lecturer at the University of Salford’s business school, says the mandate is becoming ‘more of a hindrance than help’ – which could prompt other car makers building cars in Britain to follow suit in cutting operations.

‘Along with the October budget that significantly impacted business in general this was the last straw for Stellantis,’ he said.

‘Other UK automotive manufacturers may soon be reviewing their manufacturing footprint as the UK ZEV mandate becomes more of a hindrance than help for strategic growth.

‘We must consider that UK automotive manufacturers are predominantly multinational with considerable capacity elsewhere and can relocate, leaving behind empty factories.’ 

Demand for electric cars, he added, has ‘flatlined’ – largely owing to their expense and the anxiety over being able to charge away from home. Only a fifth of all public chargers are ‘fast chargers’ that can top up most of a battery in under half an hour. 

In addition, the government scrapped a £5,000 grant towards buying a new EV in June 2022, which had been widely credited with boosting sales. 

Dr Owens added: ‘While charge point numbers are increasing, this needs to accelerate further to align support with the ZEV mandate for manufacturer’s targets, which will also support consumer confidence to buy into the market.’

Willson, who went on to present Fifth Gear on Channel 5 and now campaigns to make electric cars cheaper via organisation FairCharge, said people were turned off of EVs because there is no longer an attractive incentive to pay over and above the cost of a petrol car in the name of eco-friendly motoring.

He said of the Luton news: ‘It’s really terribly sad. And for those 1,100 people who are going to lose their jobs, you know, it’s going to be a huge, huge tragedy.

‘I hope they keep it open. But even if the government said they were going to stop the targets, would that save Luton? I’m not sure.’

‘What the government must do is to make it easier for consumers to buy these cars, and that means offering incentives, like, you know free parking in some towns and cities,’ he said.

‘Take away the mandate, and you know we fall behind, and China will overtake us.’

Andy Palmer led the Nissan Leaf car project before taking up the role as CEO of Aston Martin, a role he quit in 2022 (pictured in 2018)

Workers inspect vans at Vauxhall’s plant in Luton in this file photo from 2015. Stellantis said the decision to close the plant was linked to the ZEV mandate

Ford boss Lisa Brankin (left) said today there is no consumer demand for electric vehicles – while Dr Jonathan Owens of the University of Salford (right) said the mandate was a ‘hindrance’

In a bid to try to meet the mandate car makers, including Stellantis, have hit the panic button and slashed the costs of some of their EVs by as much as 35 per cent, saving motorists thousands.

But trade group the Society of Motor Manufacturers and Traders estimates car firms are taking a £4bn hit to make discounts, and has warned the mandate will have ‘devastating impacts on business viability and jobs’.

The Luton factory closure proposal comes after Ford, wildly short of its ZEV targets, announced it would cut 800 UK jobs over the next three years.

In the aftermath of the Vauxhall announcement, business secretary Jonathan Reynolds told an SMMT dinner on Tuesday that he ‘heard’ manufacturers’ concerns – but appears to be holding firm on keeping the targets in place. 

Andy Palmer, the design chief on the Nissan Leaf electric car, says this is the right thing to do – but admits he was ‘disappointed’ with the slow uptake of his car, a problem that persists into the modern day with fears over range anxiety and the availability of chargers.

An August Consumer Intelligence poll found more than half of drivers say these and other factors still put them off switching. 

‘I think we misjudged how difficult it would be (to persuade people to go electric),’ he told MailOnline.

Mr Palmer – who went on to run Aston Martin before becoming interim CEO of charger firm PodPoint, says the government needs to give car manufacturers ‘wiggle room’ rather than handing them punitive fines of £15,000 per non-compliant car over the target.

That way, Labour can keep its 22 per cent goal – and the car manufacturers can put the money that would have gone on fines into battery tech and new models.

The Stellantis Luton plant pictured today. More than 1,100 jobs are at risk and only a fraction of them will be moved to Cheshire if the closure goes ahead

Research by This is Money suggests some of the biggest car firms and groups are falling behind on targets for battery electric vehicle sales

‘We do have wiggle room even within the 22 per cent this year. I reckon the actual number that will be achieved is probably 18 per cent. Nobody will pay any fines because they can buy carbon credits, or count some of their hybrid (cars),’ he said.

Quentin Willson agrees – and says the money should be diverted into funding better car batteries.

‘We shouldn’t be fining car companies money, and then you know it going away from them,’ he added.

‘If there are any fines or any levies, then that money should go back into the battery industry, and and, you know, into a fund. And we’ve talked to government about this. Let’s make sure that that money is repurposed.

‘We’ve got so much talent here that we really could be an electric superpower outside China. And remember, we are now the second most successful market for EVs in Europe, and that’s because of the ZEV mandate.’

Experts say it is inevitable that most people, save for die-hard motorists and enthusiasts, will have to move to electric cars eventually – but say more needs to be done to ensure people feel part of the conversation, rather than being forced into it.

Ford UK boss Lisa Brankin told BBC Radio 4’s Today programme government-backed incentives were needed ‘urgently boost the uptake of electric vehicles’ 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.’

Business secretary Jonathan Reynolds told MPs today the government had tried to find a way to keep the Luton plant open

The general consensus among motoring industry experts is clear: if Labour wants to keep the mandate, it needs to show it is serious about boosting EV sales. But car companies need to do their part too – by investing early and investing big in electric car tech.

Andy Palmer concluded: ‘Consumers will say, quite rightly, that the electric car is too expensive, and a lot of commentators will say the same thing. So manufacturers have to take the price down to a certain price point. They need to make affordable cars.

‘It’s good for the consumer, but it’s very bad for the car makers that aren’t ready because they will lose a lot of money on those cars, and that’s why they’re complaining.

‘Governments need to keep the pressure on but also, particularly in the UK, I think we do have to throw a bit of a lifeline to those laggards – those manufacturers that were a bit slow in adopting (electric vehicles).

‘We need to give them a bit of a chance.’

Business secretary Jonathan Reynolds told MPs on Wednesday the government had done ‘everything we possibly can to prevent this closure from happening’.

The government is now set to consult with car makers on bringing forward the 100 per cent sales target to 2030,

He added: ‘The Secretary of State for Transport and I met Stellantis many times over the summer and again on Tuesday morning to discuss the situation and the acute pressures the company is facing.

‘We have worked hard to find a solution that would support the business and ensure people kept their jobs, and we confirmed in writing we were willing to consider any solution put forward.

‘However, despite our best efforts, we have been forced to accept that this is ultimately a commercial decision by Stellantis as they respond to wider challenges within the sector.’