The National Franchised Dealers Association is urging the new Labour Government to meet with representatives of the automotive retail sector at the Labour Party Conference and do more to stimulate the market for electric vehicles.
The NFDA’s is calling for action in three essential areas to support the industry’s growth and sustainability:
1. Stimulating the Private Electric Vehicle Market
Boosting the adoption of electric vehicles (EVs) in the private market should entail reintroducing upfront price incentives for EV’s, harmonising the VAT between public and private EV charging at 5% and reducing the Vehicle Excise Duty which will be paid by EVs in 2025-26 by 20%. NFDA also continues to oppose increases in fuel duty rates.
2. Amending the ZEV mandate
NFDA believes that the UK Zero Emission Vehicle mandate, while well-intentioned, is inadvertently stifling the new car market by limiting the supply of new vehicles from manufacturers. This policy places immense pressure on manufacturers to meet stringent targets, leading to production bottlenecks and delays. As a result, consumers face reduced choices and higher prices, which is hampering the growth and competitiveness of the UK automotive industry. NFDA is calling on the Government to review and amend the mandate to ensure UK consumers are not unnecessarily punished. The ban on the sale of ICE vehicles should not apply until 2035.
3. Overhauling the Apprenticeship Levy
Although reform of the Apprenticeship Levy was announced in the King’s Speech in July, it is crucial that this is implemented effectively and in collaboration with the NFDA and key industry stakeholders.
NFDA is urging the Government to reform the current apprenticeship system to better meet the needs of the automotive sector. An overhaul of the Apprenticeship Levy is necessary to ensure that it effectively supports the training and development of the next generation of automotive professionals.
NFDA would recommend removing or extending the claw-back cap, ring fence 50% of funding solely for apprenticeships, and make the Levy more flexible by allowing access to a wider range of courses.
Commenting on NFDA’s calls to action, CEO, Sue Robinson, said, “As the automotive sector faces significant challenges, it is crucial for the new Labour Government to take decisive action. By addressing key issues such as stimulating the electric vehicle market, amending the ZEV mandate and overhauling the Apprenticeship Levy, we can ensure a sustainable and competitive future for the UK automotive industry.
As stated by the ACEA Board, “We are missing crucial conditions to reach the necessary boost in production and adoption of zero-emission vehicles: charging and hydrogen refilling infrastructure, as well as a competitive manufacturing environment, affordable green energy, purchase and tax incentives, and a secure supply of raw materials, hydrogen and batteries. Economic growth, consumer acceptance, and trust in infrastructure have not developed sufficiently either.
“As a result, the zero-emission transition is highly challenging, with concerns about meeting the 2025 CO2 emission reduction targets for cars and vans on the rise. The current rules do not account for the profound shift in the geopolitical and economic climate over the past yearsand the law’s inherent inability to adjust for real-world developments further erodes the competitiveness of the sector.”
It goes on to say, “This raises the daunting prospect of either multi-billion-euro fines, which could otherwise be invested in the zero-emission transition, or unnecessary production cuts, job losses, and a weakened European supply and value chain at a time when we face fierce competition from other automaking regions.
“The industry cannot afford to wait for the review of the CO2 regulations in 2026 and 2027, we need urgent and meaningful action now to reverse the downward trend, restore EU industry competitiveness and reduce strategic vulnerabilities. For heavy-duty vehicles, an earlier review will also be absolutely critical to ensure vital conditions like infrastructure for trucks and buses are scaled up in time.”
Some Chinese marques are scrambling to buy former vehicle assembly plants from European brands to get around costly EU tariffs and the motor sector is now reconsidering its dash into EVs and planning to maintain petrol engine models for a few more years as the charging network expands and costs are brought down.
Jaguar has been caught out with an end its ICE models and a gap of 12 months before its EVs hit showrooms, leaving a diminishing number of dealers to rely on Land Rover sales in the interim.
In a separate move, Volkswagen Group is reportedly preparing to shed 30,000 EU jobs due to slowing sales and a reimagining of its models’ portfolio in the near future.
