Ford Motor Company has called on the UK government to reintroduce subsidies to help automakers achieve their electric vehicle (EV) sales targets, as current consumer demand for EVs is lacking.
The UK had previously mandated that 22% of new car sales this year must be zero-emission vehicles, with this figure rising to 80% by 2030. For vans, the requirement starts at 10% this year and increases to 70% by 2030. Automakers failing to meet these requirements face fines of up to £15,000 per vehicle, but they can avoid penalties through a credit trading system.
Lisa Brankin, Chair of Ford UK and Managing Director for UK and Ireland, emphasized that UK Chancellor Rachel Reeves needs to reintroduce incentives in the current budget to boost consumer demand for EVs. Brankin noted that Ford will rely on the flexible credit trading system to avoid fines this year as it cannot meet the 22% target.
Brankin also highlighted that the UK government's targets are "very ambitious" and require support to be achievable. She pointed out that European governments are reducing incentives, and Chinese automakers are making significant inroads into the European market.
Specifically, Brankin suggested halving the value-added tax (VAT) on pure EVs to 10% for the next three years and reducing VAT on street charging, which is currently higher than home charging, to encourage EV purchase among consumers without private driveways. She also called for maintaining subsidies for plug-in vans and corporate tax breaks for commercial vehicles.
According to the Society of Motor Manufacturers and Traders (SMMT), 17.2% of new cars registered in the UK from January to August this year were pure EVs, falling short of the annual target of 22%. Ford plans to introduce its EV models in the UK in 2024, and Brankin acknowledged that the company is behind schedule.
Ford is not the only automaker seeking UK government support. In June, Stellantis threatened to halt car production in the UK unless EV sales targets were relaxed. However, Brankin did not disclose Ford's potential actions if the government ignores its plea.
