The UK’s electric vehicle (EV) market has been showing signs of strain, and the resignation of Carlos Tavares, CEO of Stellantis, is just the latest indication of the challenges faced by some of the world’s largest car manufacturers. Stellantis, which owns well-known brands such as Fiat, Vauxhall, Jeep, and Peugeot, recently announced the closure of its Vauxhall van factory in Luton, partly blaming the impact of stringent EV sales targets imposed by Westminster. Similarly, Ford has revealed plans to cut 4,000 jobs across Europe, including 800 in the UK, due to slower-than-expected growth in EV sales.
For the Labour Party, this moment presents both a challenge and an opportunity. The government has reinstated the 2030 deadline – which was pushed back to 2035 by Rishi Sunak – to ban the sale of new internal combustion engine (ICE) vehicles. However, car manufacturers are lobbying for a weakening of the zero-emission vehicle (ZEV) mandate, which requires a growing share of EVs to be sold leading up to this deadline. Meanwhile, political figures on the right, such as Kemi Badenoch and Nigel Farage, have been quick to caricature the country’s net-zero goals as a threat to economic prosperity and growth.
In this context, Labour must step up and demonstrate strong leadership. The party needs to back its green ambitions with robust, resource-driven measures that can help stimulate both demand for EVs and public support for the green transition. Jonathan Reynolds, Labour’s business and trade secretary, recently affirmed the party’s stance, stating: “When this government says that decarbonisation must not mean deindustrialisation, we mean it.” But to truly support the car manufacturing industry, the government should focus on more than just maintaining the status quo. It needs to take bold, transformative steps that will unlock greater demand for electric cars and help fuel the national conversation on decarbonisation.
There is no shortage of ideas on what could make a real difference. For one, the House of Lords’ environment and climate change committee has called for “targeted grants” to make EVs more affordable until price parity with petrol and diesel vehicles is achieved. Equally important, however, is extending financial support for EV purchases to private consumers, rather than just company fleets, to ensure that the transition to electric cars is within reach for the broader public.
Charging infrastructure is another key challenge. The UK must accelerate the rollout of charging points, particularly in areas outside London and the south-east, and at motorway service stations. Moreover, the current 20% VAT imposed on public charge points, which disproportionately impacts drivers who lack off-street parking, needs to be reduced to a more reasonable level – ideally in line with the 5% VAT rate applied to household electricity. As members of the environment and climate change committee have emphasised, these measures must be coupled with a communication strategy that tackles the anti-green narratives now prevalent in parts of the media and across political right-wing circles.
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For the government, a proactive, front-foot approach is essential. It should stay committed to its plans, especially considering China’s increasing dominance of the global EV market. For UK-based car manufacturers, this means accepting the reality that they may need to absorb some financial losses in the short term to maintain a foothold in the future electric vehicle market. A government lifeline for British automakers could ensure that the country remains competitive in the growing EV sector.
Labour, as the party that champions the moral imperative of the green transition, must ensure that its financial framework is truly incentivising for private buyers. In parallel, a state-of-the-art charging infrastructure should be built to ensure consumer confidence in EV ownership. If done right, Britain’s green transition could not only safeguard the environment but also deliver a powerful industrial legacy that benefits both businesses and consumers.
Now more than ever, Britain’s EV market needs a recharge. Ministers must act boldly to drive the green revolution forward, making the necessary investments to secure the future of the sector and the country’s economic prosperity. Without this, the UK risks losing ground in one of the most crucial sectors of the green transition, and with it, the opportunity to lead the world in the electric vehicle revolution.
