News analysis ZEV-y weather Industry experts say
pressure from the ZEV mandate is creating uncertainty in the EV market as manufacturers scramble to meet targets.
Efforts by carmakers to comply with government EV targets are provoking market turmoil, the industry has warned. Sean Keywood reports.
That’s according to Philip Nothard, insight director for data firm Cox Automotive, who said the legislation needed to be reviewed. Under the mandate, manufacturers are required to sell an increasing percentage of EVs annually, or face fines. Nothard said: “The ZEV mandate may be grounded in good intention, but it is putting the new vehicle sector under impossible and unreasonable pressure. “The tactics we are likely to see deployed by OEMs and retailers to hit their numbers in the closing months of this year will be drastic, expensive and risky, creating an unrealistic and unnatural market with potentially far-reaching consequences over the long term.
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“We urge the government to listen to the sector’s feedback, review the mandate and implement support packages to fast-track EV adoption.”
Nothard’s comments came in response to the latest UK new car sales figures from the Society of Motor Manufacturers and Traders (SMMT). These showed the market had declined year-on-year in August for the first time in over two years, but EV registrations rose by 10.8%, taking a 22.8% market share and
ar manufacturers are being compelled to take drastic measures to meet the UK Government’s ZEV mandate, which could cause long-term harm to the market.
therefore meeting the level required by the mandate – although the SMMT said its full-year EV sales projection was still below this level.
The organisation therefore said urgent action was needed to boost the EV market, including binding targets on public chargepoint provision, the reintroduction of incentives for private buyers, and the removal of disincentives, including the Vehicle Excise Duty expensive car supplement, set to be introduced in 2025.
SMMT chief executive Mike Hawes said: “August’s EV growth is welcome, but it’s always a very low volume month and so subject to distortions ahead of September’s number plate change.
“The introduction of the new 74 plate, together with a raft of compelling offers and discounts from manufacturers, plus growing model choice, will help increase purchase consideration and be a true barometer for market demand.
“Encouraging a mass market shift to EVs remains a challenge, however, and urgent action must be taken to help buyers overcome affordability issues and concerns about chargepoint provision.” The issues relating to the ZEV mandate had previously been addressed by Guy Pigounakis, commercial director for MG Motor UK, who said they were having a serious impact on EV residual
values, which could in turn lead to higher leasing costs for fleets.
Speaking at an MG media event, Pigounakis said: “There’s a strong suspicion in the industry that come Q4 some manufacturers will just deliberately dry up supply of petrol cars, as they have done on several occasions in the past for [EU] CAFE regulations, purely and simply to drive up the percentage share they’ve got of the electric cars they have. “There’s frantic scrabbling around looking for partnerships, and the other thing that’s going on, of course, is a huge amount of discounting by some manufacturers, especially the premium brands, to get their cars into a more affordable position for customers to actually buy.”
Pigounakis explained that having had success in the corporate sector until now, manufacturers were now seeking to get retail customers into EVs. He continued: “Some of the discounts are having a catastrophic impact on residual values, to the point that if you talk to bankers, the leasing sector in particular, they are starting to get very nervous about some of the contract hire terms that they have in the fleet market, purely and simply because they are looking at their exposure in their electric fleet, and the decline in residual values they are seeing with the used values of those cars.”
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