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Government’s Net Zero Strategy ushers in ZEV mandate and extra EV funding

The Government has published its Net Zero Strategy, setting the UK on a clear path to net zero by 2050 and including big plans for electric vehicles.

There are some major commitments on transport, including a zero emission vehicle mandate and further funding of £620m for zero emission vehicle grants and EV infrastructure

Published ahead of the COP26 conference in Glasgow from 31 October, the strategy sets out how the UK will remove carbon from power, shift to electric vehicles and start to phase out gas boilers.

For transport, there are some major commitments, including a zero emission vehicle mandate to ensure carmakers are selling a gradually rising of fully electric vehicles every year, reinforcing the 2030 ICE ban set out in last year’s 10-point plan and giving fleets confidence to go electric.

Such a system has already proved effective in California and other US states, and the Government had already said in this summer’s Transport Decarbonisation Plan that it would consult on a ZEV mandate. Earlier this year, its own eco advisers, the Climate Change Committe had published a report earlier this year saying such a move was essential.

It’s now confirmed that the ZEV mandate will take effect from 2024 and the Government will publish a consultation in early 2022 on the design of the ZEV mandate, including uptake trajectories, CO2 emissions regulation to ensure standards in the remainder of the fleet are maintained, and how and when targets will be set and enforced.

The Net Zero Strategy also sets out further funding of £620m for zero-emission vehicle grants and EV infrastructure, including further funding for local EV Infrastructure – and with a focus on local on-street residential charging.

The Government has also pledged to allocate a further £350m of the up-to-£1bn Automotive Transformation Fund (ATF) to help carmakers and their supply chains ramp up for EVs – the fund has already been used to support Ford’s plans to turn its Halewood into a components plant for its future electric vehicles, announced yesterday, and Nissan’s flagship Electric Vehicle Hub in Sunderland.

The Strategy also includes commitments on active travel and transport, echoing the Transport Decarbonisation Plan and including:

  • £2bn investment which will help enable half of journeys in towns and cities to be cycled or walked by 2030.
  • £3bn to create integrated bus networks, more frequent services and bus lanes to speed journeys.
  • Transformation of local transport systems, with 4,000 new zero emission buses and the infrastructure to support them, and a net zero rail network by 2050, with the ambition to remove all diesel-only trains by 2040.
  • Significant investment in rail electrification and city rapid transit systems.

Transport Secretary Grant Shapps said: “We’re going further and faster than ever to tackle climate change. Together with an additional £620m to support vehicle grants and charging infrastructure, our plans for an ambitious zero emission vehicle mandate show that we’re leading the world on the switch to EVs.

“We published our Transport Decarbonisation Plan in July which was just the start – as we look ahead to the COP26 climate change conference and beyond, we need to continue our efforts to deliver its ambitious commitments. This will provide certainty to drivers and industry as we create sustainable economic growth, boost job opportunities and clean up the air in our towns and cities.”

The fleet and transport sector reaction

The commitments on transport in the Net Zero Strategy have already been broadly welcomed by many in the fleet and transport industry but with some caveats.

BVRLA chief executive Gerry Keaney said: “The UK is in an electric vehicle arms race with the rest of the world and the Government believes a ZEV mandate will secure the millions of battery electric vehicle imports it needs to meet its ambitious phase-out deadline.

“We welcome the clarity that today’s announcement provides and look forward to helping policymakers’ deliver a simple and effective scheme.

“This is uncharted territory for the automotive industry, and it is vital that any future ZEV mandate includes a review mechanism to assess potential market failures. The mandate must also take account of the very different uptake trajectories seen between cars and vans.

“This announcement is all about maintaining electric vehicle supply, and it needs to be backed up by some equally ambitious policy measures aimed at delivering electric vehicle demand.

“We hope that next week’s Budget will see the Government commit to providing long-term financial support and tax incentives that will accelerate the roll-out of public and private charging infrastructure and absorb the price premium that many prospective electric vehicle users are still faced with.”

The AA also welcomed the moves towards Net Zero and the EV-specific incentives.

Edmund King, AA president, said: “This new charge point funding targeted more at the eight million households without dedicated off-street parking is a welcome step which will give power to electric drivers.

“With the cost of petrol and diesel rising, the desire to switch to electric is stronger than ever before. Should the Chancellor go a step further next week and scrap VAT on targeted new EV sales, he would deliver a truly electrifying Budget that could ‘Get Electric Done’.”

But he added: “The introduction of a zero emissions vehicle mandate is probably unnecessary. Manufacturers are already taking big steps in order to meet the 2030 ban on new petrol and diesel cars and vans, but bringing in this ‘red tape’ exercise could harm car production plans already in place.”

However, speaking on behalf of the auto industry, the Society of Motor Manufacturers and Traders (SMMT) said such a scheme could help drive EV uptake.

Mike Hawes, SMMT chief executive, commented: “The automotive industry is putting zero-emission vehicles on Britain’s roads at pace beyond all forecasts, such is the choice and appeal of these new models.

“A well-designed, flexible regulatory framework could help maintain or even increase this pace to ensure we deliver on our shared decarbonisation ambitions.

“Consumers need choice and encouragement, irrespective of where they live or what they drive. The additional targeted funding for electric vehicles is welcome and will help ensure affordability for certain models. To ensure we have the reliable, accessible and nationwide charge point network this transition needs, however, requires a similar regulatory approach. The announcement of additional funds for on-street residential charging must energise much-needed private sector investment but consumers will only have confidence in the future if there are commensurate and binding requirements on the infrastructure sector. Combining regulatory commitments with financial ones is the key to a successful transition to zero-emission road transport.”

And  Vauxhall has largely welcomed the ZEV mandate, which it said would provide clarity to the UK motor industry and the rest of the electric vehicle ecosystem, on the basis of a 360-degree approach.

Managing director Paul Willcox continued: “Vauxhall believes a ZEV mandate can work in the UK provided there are complimentary targets on the other key parts of the electric vehicle ecosystem which are key to driving Britain to a more sustainable transport infrastructure. With our Ellesmere Port plant set to become the first electric vehicle only factory within the Stellantis group, we look forward to working with the government on the detail of how a ZEV mandate can be implemented and help support a sustainable vehicle marketplace in the UK.”

Independent transport research organisation New AutoMotive – whose ongoing modelling had shown the need for a ZEV mandate to avoid mass hybrid uptake skewing net zero plans – embraced the news.

Ben Nelmes, head of policy at New AutoMotive, said: The motoring industry needs certainty that the UK is embracing electric to increase investment in gigafactories and manufacturing. A California-style ZEV mandate will reduce the cost of electric cars for consumers, and provide clarity for businesses – whether they are installing charge points or making electric cars.

“Today’s announcement puts the UK well ahead in the global transition to electric cars. This means cheaper transport for drivers, more jobs and investment in UK car manufacturing and cleaner air for everyone. We now need to see our European neighbours following in our footsteps.”

And ChargePoint said that mandate would bring certainty for the charging sector.

Tanya Sinclair, policy director UK & Ireland, said: “We have seen the positive impacts on EV uptake of these schemes in North America, where they have significantly built up availability and consumer confidence of electric vehicles.

“Across our fast-growing charging sector, a UK ZEV mandate will create huge confidence for those operating and investing in the charging industry. This industry – consisting mainly of start-ups and scale-ups – will for the first time be able to clearly anticipate demand for charging infrastructure and create a clear roadmap to meet these targets.

“With this new policy, the UK is taking an essential step on the road to 2030 as well as contributing to the creation of a better EV driver experience in the UK.”

Alphabet also used the Net Zero Strategy as a call for further certainty on company car tax, which it said would be the ultimate driver of EV take-up.

David Bushnell, principal consultant, said: “Concrete future tax rates for company cars are needed now to empower decision-makers to make the change to electric with confidence, and not be hit down the line by a jump in taxation. Not only does this support fleet buyers with future planning, particularly those currently locked in to petrol or diesel fleet contracts, but it also helps increase company car drivers, preventing people opting for cash. This is essential to feed the used car market and ease drivers leasing their own cars which may not be carbon-efficient. As the biggest buyers of electric vehicles, tax certainty is crucial for the fleet industry, and it’s this that will be the driving factor to the success of electrifying our roads.”

To access the Government’s Net Zero Strategy, click here.

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.