UK Car Industry Faces Crisis Over Electric Vehicle Transition

Manufacturers urge government to cut VAT and reinstate subsidies as demand for electric vehicles lags behind mandated targets.

The UK government is under pressure from car manufacturers to reduce VAT on electric vehicles and restore purchase subsidies to boost sales and meet zero-emission vehicle (ZEV) mandates.
Electric vehicles accounted for less than 17% of UK market sales in the first half of the year, falling short of the 22% target for 2024, with private buyers representing fewer than one in five purchases.
Stellantis, the owner of Vauxhall, cited the ZEV mandate as a significant factor in its decision to close its Luton factory, resulting in 1,100 job losses, while other manufacturers warn of further closures without policy changes.
Industry leaders, including Nissan and Ford UK, have called for measures such as VAT cuts on EVs and public charging, as well as revisions to upcoming road tax increases, to prevent further declines in demand.
Chinese EV manufacturers are gaining global market dominance, raising concerns about job losses in Europe and the UK, as well as the strategic implications of the reliance on imported electric vehicles.