UK car industry faces tough choices as EV sales miss government targets
British auto-makers struggle with low electric-vehicle demand while government considers policy changes. Factory closures and job-cuts hit the sector as manufacturers push for tax breaks to boost sales
The UK auto sector faces major shake-ups as electric-vehicle sales dont match official expectations. Less than 17% of cars sold in mid-2024 were electric - way below the governments required 22% target
Only BMW‚ Mercedes‚ and Geelys brands (which includes Polestar and Volvo) hit current targets; most companies lag behind. Fleet buyers make-up most EV purchases while regular customers stay away from all-electric models
The real issue that weʼre facing is that customer demand isnt at the same level as the government mandate
The industry wants quick action - heres what they ask for:
- 50% VAT cut on new EVs
- Lower public charging taxes
- Return of buyer incentives
- Changes to road-tax plans
Job losses hit hard as companies adjust: the Luton plant (with 1‚100 workers) closes down‚ while Schaefflerʼs Sheffield site - making parts for regular cars‚ faces shut-down affecting 200 people
Jonathan Reynolds‚ Business Secretary confirms theyʼll look at EV rules again but manufacturers say its not enough without help to boost sales. The switch to electric needs to speed up: next years target jumps to 28%‚ reaching 80% by 2030
Chinese makers push prices down‚ asking suppliers for 10% cuts in what they call a “grand final battle“. European leaders worry about keeping car production local - Ursula von der Leyen starts new plans to protect the continents auto industry
We know from previous transitions between technologies that incumbent firms can get left behind – we all remember Blockbuster Video or Kodak
