Ford’s boss says it may restrict petrol models in Britain to meet EV targets

Ford could limit the number of new petrol models in Britain to increase its share of electric vehicle sales and avoid significant fines for manufacturers from this year.

Martin Sander, managing director at Ford Model e Europe, said restrictions on the availability of new petrol cars by Britain’s second most popular car brand were also likely to push up prices for buyers.

It comes as carmakers face a difficult task in meeting binding sales thresholds for electric cars, which will rise from 2024 until the planned total ban on sales of new petrol and diesel passenger cars in 2035.

The latest UK car sales data published this week shows that public demand for electric cars has fallen in recent months, with just one in six electric cars registered in April having been purchased by private buyers.

Speaking at the Financial Times Future of the Car Summit in London TuesdayMr Sander also said Ford would scale back its plans to sell only electric vehicles in Europe by 2030.

He said the target is now “irrelevant” because electric car sales are “below expectations.”

While Prime Minister Rishi Sunak made the decision last year to delay the ban on the sale of new combustion engine cars in Britain from 2030 to 2035, the government’s Zero Emission Vehicle (ZEV) mandate has put pressure on manufacturers to increase their share of EVs. sale.

The mandate, described by ministers as ‘the world’s most ambitious regulatory framework for the transition to electric vehicles’, was officially ratified in January.

The law means that 22 percent of car registrations from every mainstream brand must be electric by 2024, with a scale-up to 28 percent next year and to 80 percent by the end of this decade – before rising to 100 percent by 2035.

Failure to meet the sales targets of the ZEV mandate could result in huge fines for carmakers of £15,000 per model sold below the required threshold.

After the first four months of 2024, it is clear that many manufacturers are well behind the 22 percent requirement for this year.

At the end of April, only 15.7 percent of all British registrations were electric cars.

Mr. Sander told the summit panel on Tuesday that it belongs to Ford the only option to avoid the fines was to shift sales of gasoline cars to other countries.

While a number of automakers have said the goals of the ZEV mandate are challenging, Ford is the first to say it could limit the availability of gasoline models to increase its EV sales share.

In 2023, the US brand sold 144,072 new cars in Britain (only VW sold more with 162,087 registrations) and the first deliveries of its new electric Explorer will take place in September, after a six-month delay.

Last July it also ended production of the high-volume Fiesta – Britain’s best-selling car – to focus on new EV models.

Mr Sander told the audience: ‘We cannot bring electric cars to market against demand. We are not going to pay any fines. We are not going to sell electric vehicles at huge losses just to meet requirements.

‘The only alternative is to take our shipments of (internal combustion engine) vehicles to Britain and sell these vehicles elsewhere.’

Yesterday, the SMMT cut its EV sales forecast for this year, amid falling demand for electric cars in Britain.

Although 107,031 electric cars have been registered so far in 2024 (a 10.6 percent increase on sales in the first four months of last year), the data shows that fewer than one in six electric cars sold in April were purchased by the general public.

Some of this is due to cars purchased under labor sacrifice schemes boosting fleet sales, but it also reflects lower-than-expected demand.

As such, the trade body has now lowered its EV market share forecasts to less than one in five new cars (19.8 percent), which is well below the 22 percent requirement of the ZEV mandate.

Mike Hawes, the chief executive of the Society of Motor Manufacturers and Trader, said an ‘absence of government incentives for private buyers’ is having a clear effect on demand for battery-powered cars.

“While attractive deals exist for electric vehicles, manufacturers cannot finance the transition to the mass market on their own,” he explained.

‘Temporarily reducing VAT, treating electric cars as fiscally mainstream rather than luxury vehicles, and taking steps to build consumer confidence in the charging point network will drive market growth that will see the UK net-zero ambition depends.’

Sue Robinson, head of the National Franchised Dealers Association (NFDA), which represents car showrooms across the country, added: ‘With the Government disappointingly ruling out the introduction of price incentives for electric vehicles last month, the NFDA is calling on the government for an urgent reconsideration, especially as many OEMs are trying to meet this year’s ZEV mandate targets and private demand has weakened in recent months.”

The mandate does include an exemption for manufacturers to sell non-ZEVs up to a certain percentage of their fleet of new cars and vans, with the intention that ZEVs will account for the remaining sales.

Any excess non-ZEV sales can be covered by purchasing allowances from other manufacturers, by using allowances from past or future trading periods during the early years of the policy, or by offsetting with credits.

Manufacturers who fail to meet the targets face fines of £15,000 for each non-ZEV car and £18,000 per non-ZEV van.

Additional credits are offered for vehicles used by car clubs or for wheelchair accessible vehicles.

Last month, Carlos Tavares, CEO of Stellantis, the parent group of Vauxhall, Citroen, Peugeot and other major car brands, said the UK’s ZEV mandate could lead to Stellantis is even reducing the number of cars it sells in Britain Refuse to rule out that sales of some models will be stopped altogether.

But a source close to the company said the most likely option was for sales to be limited or prices to rise to compensate.