The UK’s export of cars has fallen in July, as the industry adjusts to meet the net zero target of producing purely electric vehicles (EV) by 2035.
The news comes as the new Labour government is said to be planning a consultation on the target.
Exports and production fall
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that UK car exports fell 16.3% last month. These same figures were 14.3% below the same point in 2023.
Production was also down, falling 14.4% in July. SMMT said that this was down to model changeovers and “temporary” supply chain challenges.
UK carmakers produced 482,000 cars in the first seven months of the year, down 9% from 2023.
SMMT CEO, Mike Hawes, said that some “readjustment” was to be expected following last year’s high production numbers and that “an ongoing degree of volatility is likely as the industry restructures to transition to zero emission vehicle production.”
Net zero transition
The transition to net zero is likely to play a key role in the car industry, with mandates on minimum levels of EV production and sales coming in. By 2030, 80% of new cars must be zero emission, with this target rising to 100% by 2035.
The rules had been slated to come into force by 2030. However, then prime minister Rishi Sunak pushed this back to 2035. Labour promised to reinstate the original date in its election manifesto.
Now, Politico Morning Trade reports that Keir Starmer’s government is planning to launch a consultation on the UK’s zero emissions vehicle mandate and the accompanying 2035 ban on combustion engines.
‘Committed’
“We are committed to phasing out the sale of new petrol and diesel cars by 2030, and we expect that manufacturers will meet this year’s mandate,” a government spokesperson told Politico.
“We will engage with industry around these changes and will announce more details in due course.”
Industry representatives said they had been told to expect a survey by the Department for Transport.
Carmakers had previously said they would miss targets on EV sales. In early August, SMMT revised EV sales down to 18.5% in 2024, down from earlier predictions of 19.8%.
Risk to UK industry?
Schmidt Automotive Research, a specialist car research firm, said they expected that Chinese EVs would be shifted away from Europe and towards non-EU countries as a result of the European Commission (EC)’s decision to impose tariffs on Chinese vehicles.
The zero emissions vehicle mandate was seen as a positive for Chinese exporters.
Prioritisation
Matthias Schmidt, the firm’s founder, told the Telegraph:
“If the EU tariffs stick, we would expect the Chinese to prioritise the UK.
“The UK is implementing strict regulatory measures such as the zero emission vehicle (ZEV) mandate, so the Chinese brands stand to benefit from that because of their high mix of EV sales.”
Business and trade secretary Jonathan Reynolds has already confirmed he is not asking the Trade Remedies Authority to investigate China’s EVs, in stark contrast to his European and North American counterparts.
He said he was remaining “vigilant” on the issue.
However, professor of business and sustainability at Cardiff University, Peter Wells, told Auto Express that the UK would likely need to follow the EU decision.
“The UK market is too small to be a haven, but certainly it would be attractive to build an initial presence.”
Canada joins in
This week (26 August), Canada joined the EU in hitting Chinese EVs with tariffs. Federal finance minister and deputy PM, Chrystia Freeland, announced that 100% tariffs would be imposed on all EVs coming from the Asian nation.
She said:
“Canadian workers and critical sectors, including steel and aluminium, however, are facing an intentional, state-directed policy of overcapacity, undermining the Canada’s ability to compete in domestic and global markets.
“That is why our government is moving forward with decisive action to level the playing field, protect Canadian workers, and match measures taken by key trading partners.”
Last week (22 August), the EC unveiled their proposed tariff rates, following accusations of Chinese low-priced exports and excessive government support for the industry.
In response, Beijing announced a probe into European dairy products across eight EU countries.