20 Sep 23

Fleet dismay as UK delays ban on ICE vehicles until 2035

Fleets, leasing companies and manufacturers have reacted with anger to the UK Government’s decision today (20 September) to introduce a five-year delay to the ban on the sale of cars and vans with internal combustion engines.

They argue that the young EV sector needs certainty and support from the Government, not political confusion and procrastination.

Prime Minister Rishi Sunak announced this afternoon that the deadline for the last sale of ICE vehicles would be extended to 2035. The 2030 phase-out of new petrol and diesel models had been government policy since 2020.

Sunak explained that the change would give people more time to make the transition to EVs, although he still expects the "vast majority" of cars sold by 2030 to be electric, "because the costs are reducing, the range is improving, the charging infrastructure is growing."

However, he said: "It should be you the consumer that makes that choice, not government forcing you to do it."

EV sales rising

EV sales have been rising in the UK, accounting for 16.4% of car sales in the first eight months of this year, with plug-in hybrids representing a further 7.7% of sales, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

EV penetration of the fleet sector is even higher, with leasing companies reporting that up to half of their order books are for battery electric models as company car drivers take advantage of the exceptionally low (2%) benefit in kind tax rate on zero emission vehicles.

Fleets want help to hit 2030 deadline

Paul Hollick, chair of the Association of Fleet Professionals, said the overwhelming reaction from the organisation’s members had been that the delay was a nakedly political move and would only have a limited impact on their real world car fleet strategies. 

"Many, many of our members take net zero very seriously at a corporate level and believe that we should be electrifying as quickly as possible, despite some of the obstacles that remain. There is a sense that the government doesn’t necessarily share that priority," he said.

Fleet operators expect the trajectory of their car fleets to battery power to remain on course for 2030, added Hollick, although the electrification of light commercial vehicles before the end of the decade was already proving to be an enormous challenge. Sales of electric vans had only a 5.4% market share in the first eight months of the year.

"Neither the vehicle designs nor the charging infrastructure appear to be ready to meet the needs of all fleets, and there was a growing sense, at least among some, that this would have to be acknowledged sooner or later by the Government,” he said.

“We have van operators who are deeply committed to this [2030] target or even sooner at a corporate level and none of them have so far indicated any change. However, we expect that some businesses will now attempt to slow van electrification, with plug-in hybrids perhaps acting as a medium term stepping stone.”

OEM net zero strategy

Mike Hawes, SMMT Chief Executive, said the decarbonisation of road transport is essential if the UK is to achieve its 2050 net zero targets, and that the automotive industry has and continues to invest billions in the development of new electric vehicles.

“However, consumers must want to make the switch [to EVs], which requires from Government a clear, consistent message, attractive incentives and charging infrastructure that gives confidence rather than anxiety. Confusion and uncertainty will only hold them back,” said Hawes.

As a manufacturer, Ford has announced a global $50 billion commitment to electrification, launching nine electric vehicles by 2025, said Lisa Brankin, Ford UK Chair.

“This is the biggest industry transformation in over a century and the UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future,” she 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.”

Leasing industry wants action

The BVRLA, which represents the UK vehicle leasing and rental industry, also called for progress towards decarbonisation to continue at pace, despite the later 2035 deadline.

“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,” said Gerry Keaney, BVRLA Chief Executive. 

Jon Lawes, Managing Director at Novuna Vehicle Solutions, one of the UK’s largest leasing companies, said: “Any rollback in the long standing 2030 deadline sends out the wrong message to manufacturers and drivers, and threatens future investment in the UK’s battery supply and charging infrastructure, both critical to realising zero emissions mobility. We’ve come a long way and can’t lose sight of the ultimate goal to reduce carbon emissions.”

EVs will replace ICE

Regardless of the Government’s decision, fleets will have fewer choices of ICE vehicles and a greater selection of EVs towards the end of this decade, as manufacturers continue their zero emission product plans, said Philip Nothard, Insight and Strategy Director, Cox Automotive. Germany, France and Spain are all committed to ending the sale of ICE vehicles in 2035 and many OEMs have already stopped the development of new ICE models. 

“Many manufacturers have already committed to a hybrid and EV-only model range ahead of 2030, while others will have drastically reduced the number of petrol and diesel models they produce by this date,” said Nothard.

“Of greater concern right now is the UK government’s ambiguity and refusal to engage in any meaningful discussion about what it must do to encourage and accelerate the shift towards clean transportation. Incentives, investment and commitment are desperately needed, today’s news only serves to strangle progression on this further still.”

Let down and betrayed

David Savage, Vice President, UK + Ireland, Geotab, said vehicle manufacturers, fleet operators, and charging infrastructure providers will feel “let down and betrayed” by the government, given their heavy investments to tackle the existential threat of climate change.

“We need to be investing more in this transition, not reversing it,” he said. “Climate change is simply not going to wait."


Image: Shutterstock–1899280729


Authored by: Jonathan Manning