How is combustion engine phase-out going in the UK?

December 20, 2022

Boris Johnson’s government was out, before the EU, with its plan to ban fossil fuel car and van sales by 2030. T&E's UK director assesses where things stand.

The last year has been a pretty chaotic one in UK politics and government. The UK has had three prime ministers, three secretaries of state for transport and numerous relaunches to correct the policies of the previous incumbent.

Boris Johnson’s time as Prime Minister was increasingly distracted by trying to stave off threats to his premiership. Then with his resignation in July, the contest to become his successor through the summer and the short period Liz Truss as PM in the autumn, much policy development and implementation simply stopped.

After the market meltdown in September and October, the UK’s new leadership under Rishi Sunak is looking to demonstrate stability and competency, and catching up with a long delayed to-do list. Policies that have been stuck in the system for months are finally being seen to – but the political imperative is now the need to avoid rocking the boat too much.

In all the comings and goings, ministers have consistently remained committed to the phase out date for sales of traditional petrol and diesel cars and the consultation on the design of the ZEV mandate made it through in the spring before the complete logjam from the summer. But with all the political distractions this year, the failure to follow through with the necessary second consultation on the regulations for the ZEV mandate now risks the mandate’s planned start date in 2024. It also means that decisions being made now are caught up in the consequences of the USA’s Inflation Reduction Act subsidies for US electric vehicle manufacturing and the EU response.

Does the EU’s ban change things in the UK debate – in the competition to be climate leaders, or in what the car industry wants from the UK government?

One of Boris Johnson’s first acts as Prime Minister back in 2019 was to write to the EU President to set out his plans for Brexit. He wrote that the point of Brexit was to diverge from EU environmental and labour standards and that this was “central to our democracy”. Many thought that this would be about sweeping aside existing standards but this simply isn’t politically or economically viable (as Liz Truss’s brief experiment in deregulatory fundamentalism showed).

Instead, the space to diverge was more around raising some environmental standards, including on electric vehicles. There is a pro-Brexit, Conservative narrative that the UK, freed from the inertia and vested interests of the EU, can lead on the new technologies needed to tackle climate change. The EU’s adoption of its own phase out date helps those advocating for UK leadership on climate change, and avoids the UK being seen as an outlier with risky policies.

But this story is now harder to keep making. The new Prime Minister Rishi Sunak doesn’t see the environment or climate change as part of his core mission as leader of the UK, but more as something to be managed. Business investment in the UK remains low and the UK car industry worries about being squeezed between US subsidies and EU rules of origin hitting supply chains and limiting economies of scale. And the UK’s domestic demand for new cars remains sluggish as household incomes are hit by inflation and stagnating pay. The fundamentals for the switch to EVs remain strong but the stories politicians tell each other and the public matter in maintaining the backing to keep the transition at the pace needed.

What societal and economic challenges do you see ahead as the UK switches to zero-emission cars?

There’s still a slight tendency in UK debates to think of electric vehicles as if they’re still about a rather uncertain future rather than the present. But one in five new cars is now a battery electric car and more and more people will either have one themselves or have friends or family who do. EVs are now the everyday experience for many. The point is not whether they replace petrol or diesel but when they completely replace them.

UK government policy on EVs so far has focused on incentives for company car buyers as a vanguard for wider take-up, on rolling out charging infrastructure where there is already a market case to do so, and on the ZEV mandate to increase supply of EVs. In this new political and economic context, it will also need to look at how the transition can support existing and new employment in the UK, on how EVs can be affordable for all (including in the second-hand market) and to develop charging infrastructure across the UK.

Social and economic challenges remain to a fast and total transition to zero emission vehicles. The UK economy remains weak – there is less money for consumers to spend, businesses to invest and government to fund. The new political leadership in the UK, increasingly challenged by a resurgent Labour party, needs to demonstrate it hasn’t dropped the ambition on EVs it inherited.

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