Slowing down EV transition a ‘recipe for job losses’, says ECIU

Colin Walker is head of transport at the Energy and Climate Intelligence Unit.

Ayshah Tull: What’s your sense of where this consultation is going to go? Do you think that this backlash from the car industry is justified?

Colin Walker: Well, not really. I think the mandate is actually working. We’re seeing manufacturers generously discounting their electric vehicles as they compete with each other for sales to hit their targets. And that is driving down prices. And that is good for the consumer and explains why EV sales are increasing in 2024. As has been mentioned, sales are 40% higher so far than they were at this stage in 2023. September was a record-breaking month for the number of EVs sold, and for the last three months, more than 1 in 5 cars sold in the UK have been an electric vehicle. So that suggests the mandate is working and to change it, to fiddle with it, would undermine consumer confidence – would undermine business confidence. But it could also see prices going back up and demand weakening.

Ayshah Tull: We’ve heard more and more noises from the industry. Stellantis, owner of Vauxhall, saying that the rules in this have – partly – changed their decision to cut job losses. And then you’ve got Ford saying, the one thing we need is government backed incentives to urgently boost the uptake of electric vehicles. They have a point, don’t they?

Colin Walker: Well, obviously, the news from Luton is very worrying and our thoughts go out to the community. But I think it’s a bit of a stretch to try to suggest that what’s happening to the factory in Luton is because of the EV sales targets. As the chief operating officer of Nissan at the time, when all of Nissan’s vans were built, and the factory in Luton has said there’s been a lot of uncertainty surrounding that factory for decades now. And Stellantis’ problems are well-known. They’ve lost a lot of very top level executives. Sales are really down in America. Their share price is falling. And I think it’s those kind of problems that are behind this decision, not the introduction of the EV sales targets that only came into effect this year.

Ayshah Tull: There is a little bit of a worry, isn’t there, from jobs in Luton. You’ve got Sunderland, the West Midlands, people start to think and hear about net zero, and then equate that to job losses.

Colin Walker: I understand the concern that exists, but the reality is that globally EV sales are only going in one direction. Up. Last year, 14 million EVs were sold globally. This year, 17 million are expected to be sold. And it would be a strange decision to respond to that upward trajectory of EV sales by slowing down the transition to EVs. That would be a recipe for job losses, for factory closures. The future of our car industry is in shifting to producing the EVs – that our major export markets are going to increasingly demand.

Ayshah Tull: But the government needs to put more money in. Just thinking, if someone’s going to buy a new car, their old car’s broken down. It’s a cost of living crisis, and they go to buy a petrol or diesel car, that’s going to be 50, maybe 20 grand cheaper than buying an electric. So the government needs to plug that gap, don’t they?

Colin Walker: Well, certainly EVs are more expensive, but the gap between them and petrol diesel cars is coming down. And in fact, we’ve pretty much reached price parity across much of a second-hand market.

Ayshah Tull: Probably not fast enough if you’re buying something right now, though?

Colin Walker: No, and I completely understand that there is ..and this government should look at what role it can play to help the car industry make the transition to building EVs – and sell the EVs – that is required of it under the zero emission vehicle mandate. So government should certainly look at this, but I don’t think there really is any case for any weakening of the targets at this stage.

Ayshah Tull: Just from your sense of today, what we’ve seen at PMQs and people saying that there’s a political consensus that almost seems like it’s breaking down. What do you think the implications of that could be?

Colin Walker: Well, the shift to net zero is something that affects us all. And I certainly would like to see that consensus remain between the two main parties in Westminster. But the Conservatives introduced the zero emission vehicle mandate, and it’s something they should be proud of. It showed real global leadership. The rest of the world is looking to the UK and looking to emulate what we have done, and the mandate..

Ayshah Tull: They’ve said it should be pushed back from 2030 to 2035. So they’re saying that it should be pushed back.

Colin Walker: No, what Labour have done is simply returned the phase-out data to what it originally was when Boris Johnson introduced it a few years ago. There is really very little, there’s no difference at all from what Labour is proposing to happen – and what the Conservative government originally proposed.