Fleet World explores the reaction to the delay on the car and van ICE ban.

Sunak’s U-turn is expected to prove popular with anti-EV voters, although many carmakers will have gone EV-only by 2030 anyway

Industry reaction to the Government’s shock delay to the 2030 ICE ban continues to pour in as the automotive and fleet sectors start to process the PM’s major green policy shift.

Rishi Sunak confirmed the five-year delay to the ban on sales of new conventional petrol and diesel cars and vans in a hastily arranged news conference on 20 September, after the plans had been leaked to the BBC the day before (see speech here).

Full details, including whether there’ll be a further exemption for hybrids or if the market will still go EV-only by 2035, are yet to be released. But Sunak said the 2030 ICE ban deadline would be pushed back by five years to 2035, reckoning that the UK would still get to net zero by the 2050 target but by a “fairer, better approach”.

Sunak said: “It should be the consumer that makes that choice, not forcing you to do it. Because the upfront cost still is high, especially for families. The cost of living. Small businesses are worried about the practicalities. And we’ve got further to go to get the charging infrastructure truly nationwide.”

He also pushed back the deadline for replacing gas boilers and announced an increase in boiler scrappage grants.

The shift in key green policies is being positioned by the Government as a “pragmatic, proportionate and realistic approach that eases the burdens on families”.

It’s expected to prove popular with anti-EV voters, despite the fact they’ll have a diminishing pool of vehicle choices by 2030 anyway.

But while the 2035 EV-only timeline is potentially unchanged – unless hybrids get a further five-year exemption – it’s sent shockwaves across industries that were working flat out for the 2030 ICE ban deadline.

Automotive sector reaction

One sector that’s been particularly vociferous is the automotive industry – which had massively stepped-up investment in recent years to plan ahead for 2030 and meet production forecasts.

Lisa Brankin, Ford UK chair

Ford spoke when the U-turn was first leaked and warned that a delay could derail the EV transition.

Lisa Brankin, Ford UK chair, said: “Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three. We need the policy focus trained on bolstering the EV market in the short term and supporting consumers while headwinds are strong: infrastructure remains immature, tariffs loom and cost-of-living is high.”

And Andy Palmer, former Aston Martin boss and COO of Nissan, said: “If there’s one thing car companies hate, it’s uncertainty. Today’s announcement to row back on the 2030 EV target will have spooked a number of car manufacturers who are looking at the UK as a potential destination for their investment.”

The Society of Motor Manufacturers (SMMT) trade body said the industry’s commitment to a zero-emission new car and van market would remain unchanged. It also welcomed the Government’s commitment to imminent publication of the zero emission vehicle mandate on EV quotas, which it said was the “single biggest mechanism to deliver net zero”.

Mike Hawes, SMMT chief executive

But chief executive Mike Hawes said announcement must be “backed up with a package of attractive incentives and measures to accelerate charging infrastructure to give consumers the confidence to switch”.

Jaguar Land Rover however welcomed the delay in the ban – which it said was “pragmatic” – and the move to bring the UK in line with other markets.

And Toyota said the Government’s announcement was “welcome” and added that it recognised that “all low emission and affordable technologies can have a role to play in a pragmatic vehicle transition”.

But former automotive executive Ian Plummer, commercial director at Auto Trader, said: “This U-turn will cause a huge headache for manufacturers, who are crying out for clarity and consistency. And it is hardly going to encourage the vast majority of drivers who are yet to buy an electric car to make the switch.”

The view from the fleet sector experts

Both the BVRLA and AFP said the news would bring some relief to businesses running fleets but expressed wider concerns.

BVRLA chief executive Gerry Keaney

Gerry Keaney, BVRLA chief executive, said: “Those that have made huge financial and strategic investments in this technology and mobilised their customers and workforces for decarbonisation will be worried that Government is applying the brakes.

“Others will be grateful for the extra breathing space this delay provides. They will be hoping that it gives more time for costs to come down and consumer attitudes to change.”

But he warned: “Either way, everyone is likely to have less trust in the Government’s net zero strategy and will think a lot harder before committing to any of its future strategies or roadmaps.”

AFP chair Paul Hollick meanwhile warned that the sector’s reaction was “largely negative” and said its members had assumed the government would “provide more support, not move the goalposts”. He also warned of dangers to the value of existing EVs and investment in charging infrastructure.

Hollick added: “Fleets have done some incredible work when it comes to electrification and it feels as though the can has been kicked down the road in a fairly arbitrary fashion by a government that sees this move as politically expedient.”

And Alfonso Martinez of ALD | LeasePlan UK said the move would “undermine the great progress made in clearing our air and reducing CO2 emissions – and could set us back years, if not decades”.

He added: “For the past few years, we’ve been working in lockstep with the government’s ban on the sale of new petrol and diesel vehicles, helping UK businesses and public sector bodies prepare their drivers and decarbonise their fleets. The end results are always the same: once people make the switch to electric, they realise just how good these vehicles are – quieter, more economical, cleaner and cost effective.”

House of Lords Environment and Climate Change Committee criticises speech

House of Lords’ Baroness Parminter

The House of Lords Environment and Climate Change Committee, which is running an inquiry on EVs, criticised the speech and also said the PM had chosen “to kick the can down the road, rather than pick it up and put it in the recycling bin”.

Baroness Parminter, committee chair, said the overwhelming evidence so far from its inquiry was that both industry and the public need policy certainty, consistency, and clear leadership on the journey to net zero.

She also expressed concerns over how the UK’s legally binding carbon targets would now be met.

The opposition parties’ view

The opposition parties unequivocally distanced themselves from the Conservatives’ move.

Labour followed Sunak’s announcement by saying it would reinstate the 2030 ban.

Shadow environment secretary Steve Reed told Sky News: “We would keep that at 2030 because that’s what businesses have been investing for, that’s what business expects, that’s how we can meet net zero – but it’s also how we can lower the fuel costs for households who have cars and need to drive away.”

Liberal Democrat Leader Ed Davey said the Prime Minister’s legacy would “be the hobbling of our country’s future economy as he ran scared from the right wing of his own party”.

He added: “At the very time we need to stand up and lead, Sunak rolled over.”

Meanwhile, the Green Party talked of “climate dinosaurs”.

Co-leader Carla Denyer said: “This is a desperate and dangerous U-turn from the Prime Minister which will throw the UK economy, the wellbeing of its citizens and the future of our environment out the window in a misguided attempt to create divisions for political gain. More than anything this speech sounded like an admission of the Government’s failure to implement climate policy in a way that brings people with them while showing the benefits of a more sustainable future.”

EV charging businesses say BAU

Charge point operators and charging stakeholders lamented the lack of certainty but highlighted that the switch to EVs would happen regardless.

Asif Ghafoor, CEO and co-founder of Northern charging network Be.EV, commented: “The Government is no longer leading Britain’s net zero transition. Their internal squabbles and indecisiveness have created a total loss of faith in any new measures or goals they announce. It will now fall on the public to drive the changes they want to see and the market to respond to that demand.

“For the EV industry, we have to push on with business as usual. The EV transition is happening – that horse has well and truly bolted.”

Ashley Tate, Allstar Chargepass MD, said businesses are pushing ahead with EV adoption regardless of deadline changes

Ashley Tate, MD of Allstar Chargepass UK, said: “The BiK benefit is the main driver behind EV adoption amongst company car drivers; regardless of what the Government does with the deadline, businesses are pushing ahead. There’s more preference for EVs than ever before, and as a company helping to spearhead the EV transition in fleets, we’ll continue to serve that demand.”

EO Charging also said it was business as usual. CEO Charlie Jardine commented: “We would urge that the 2030 deadline remains in place, global warming isn’t slowing down neither should the push to fight against it. Despite this change in policy, we will continue to work with our industry and financial partners to ensure that the rollout continues at the current pace.”

And Moto, which is working to roll out ultra-rapid chargers across its sites, said the policy U-turn was “inconsequential” as “it remains laser focused on rolling out vital EV infrastructure to support net zero”.

Chief executive Ken McMeikan also renewed his plea for more action from government around access to power.

McMeikan said: “It is absolutely vital that, whatever the EV deadline is, the Government does not use a longer timeline as a reason to deprioritise providing the UK with the power upgrades it desperately needs. While the mention of better prioritisation on grid connection is encouraging, we need clarity and action right now. Without the right access to power to get ultra-rapid EV chargers up and running in the volumes needed across the UK, motorists will be hesitant about making the switch to EV.”

Environmental campaign groups slam move

Announced on the same day as a key UN summit on climate ambitions, the Government’s policy shifts resulted in predictably strong reaction among climate campaigners – who also questioned the PM’s claims that he’d scrapped ideas that were never firm proposals, such as compulsory car sharing, seven bins or meat taxes.

Friends of the Earth said Sunak was being “environmentally reckless and economically inept”. It also warned that the Prime Minister was “sailing into dangerous legal waters with his climate policy reversals because legally binding targets are highly unlikely to be met despite Rishi Sunak stating he is still committed to them”.

Head of policy Mike Childs added: “The Government is already being taken to court over its weak and feeble climate action plan, which we say is unlawful. If this current package is weakened further, and in a way that’s not transparent about delivery risks, then further legal challenges are inevitable.”

Laura Clarke, chief executive of ClientEarth, said: “As countries everywhere are battered by floods, heatwaves and wildfires, and as the world gathers in N York to accelerate climate action to address the crisis facing our planet, the UK Gov has signalled that it is abandoning any vestiges of climate leadership.”

And the Climate Change Committee warned of the impact on the Government’s legal obligations to not only meet its net zero 2050 target, but also the interim emission reduction targets, as also set in UK law.

Professor Piers Forster, chair of the committee, said: “We need [to] go away and do the calculations, but today’s announcement is likely to take the UK further away from being able to meet its legal commitments. This, coupled with the recent unsuccessful offshore wind auction, gives us concern.

“More action is needed and we await the Government’s new plan for meeting their targets and look forward to receiving their response to our Progress Report, expected at the end of October.”

Remarketing sector, dealers and aftermarket spotlight issues

The Vehicle Remarketing Association was outspoken about the short- and long-term impacts of the policy shift.

Philip Nothard, VRA chair

Philip Nothard, VRA chair, said: “It’s very difficult to walk away from this announcement and not conclude that the whole thing is something of a mess. While it is fair to say that within remarketing, there are many sceptics who have serious doubts about the present viability of EVs in the used car market, almost everyone in the sector has still been working towards the 2030 deadline in a diligent and committed manner, often making substantial investments along the way. The Government’s move today has, from the feedback we’ve seen, left many of those people feeling confused and resentful.”

As with the Association of Fleet Professionals, the VRA warned of impacts on electric vehicle residual values.

“In the shorter term, it is possible that this move will bring more disruption to the values of electric vehicles, purely because buyers will be confused about where the market is heading which, in turn, will reduce the appetite for electrification, creating a kind of negative feedback loop,” Nothard added.

The National Franchised Dealers Association meanwhile said a survey of its members in August 2023 had found the majority didn’t think that the UK’s 2030 target was achievable within the existing EV incentive framework and 60% of its members had supported a move towards aligning the UK market with the European Union.

Sue Robinson, chief executive, continued: “Ultimately, the phasing out of ICE vehicles in the UK requires a clear strategy from the Government to achieve it, it must be supported by forward-thinking legislation and attractive initiatives to encourage motorists in making the shift. If the UK is to reach its 2050 net zero targets it needs to support the automotive industry, now more than ever.”

And accident repair firm Autotech Group warned that the UK couldn’t let up on work to ensure technicians are ready for the EV shift.

Simon King, interim CEO, said: “Despite the Government moving its climate commitments, the aftermarket cannot afford to become complacent.

“The fact is there are more electric vehicles on the road today than there are people trained to work on them. It is imperative that we continue pushing forward with plans to upskill technicians and educate the wider public on EVs – this will not only lead to a stronger automotive sector but ensure that everyone has the right knowledge to make the transition safely and successfully.”

Accounting giants warn of auto sector impact

The major accounting firms were unambiguous in their warnings on the impact on the UK’s manufacturing sector.

PwC said the extension to the ICE ban would have “an end-to-end impact on the automotive industry”.

Cara Haffey, head of automotive at PwC UK, commented: “Manufacturers will have already begun adjusting the direction of their investment with the initial 2030 deadline in mind, it will be interesting to see if this extension will now lead to reallocation of capital to other areas.

“Separately, this could lead to a dampening of EV demand by consumers. Our latest eReadiness report showed consumer demand has fallen in the UK market compared to last year, and with an extension confirmed – consumers may look to postpone their EV transition plans.”

KPMG also warned of increased uncertainty for the sector.

Richard Peberdy, UK head of automotive, said: “Whilst delaying this deadline allows for more time for transition to electric vehicles and investment to be made in related infrastructure, we have already seen that big concerns are being raised by some of the automotive industry about the impact of this decision on investment plans, the consumer desire to transition to EVs, and the certainty that business can have in the new deadline.”

Maria Bengtsson, electric vehicle lead at EY UK

Likewise, EY said there would be significant disruption for the automotive industry.

Maria Bengtsson, EY’s UK electric vehicle lead, elaborated: “The recent substantial growth in electric vehicle sales could also be jeopardised if the delay leads to fleet operators and consumers opting to defer plans to adopt EVs. Again, this would have significant implications for OEMs and retailers that have recently invested substantially in the development and sales of EVs.”

She also warned of the move to parity with the EU’s ban.

“Widespread EV adoption will be crucial to achieving the UK’s 2050 targets, and while it may appear sensible to align the UK’s ICE sales ban with the EU’s 2035 deadline, the two markets are not like-for-like. The UK does not offer the same demand-side incentives or infrastructure environment as many EU jurisdictions and despite recent substantive inward investment into the UK EV supply chain, consumer uptake may be slower, so the Government may need to clarify whether it intends to address this with future policy.”

Many in the automotive and fleet sectors had already expressed concerns when reports of the Government’s potential U-turn first broke – their reactions are here.