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Britain’s electric vehicle policy is “terrible” and threatens to bankrupt carmakers, the head of Vauxhall owner Stellantis warned on Thursday.
Carlos Tavares said the UK’s quota regime, which requires manufacturers to meet EV sales targets that rise annually, was set at “double the natural demand of the market” and would mean carmakers would have to sell vehicles at a loss to avoid fines.
“To survive, companies have to stay in the black,” he said. “I will not sell cars at a loss.”
He had urged UK transport secretary Mark Harper on Wednesday to make the targets easier to hit by allowing carmakers to count electric van sales and EV exports towards the targets, he told reporters.
Unlike bringing back consumer incentives, which the government has scrapped, this measure would not cost the taxpayer anything, he said.
The UK could use its post-Brexit autonomy to make a quick decision and make the changes to the regime “overnight”, he added.
The UK has a China-style quota scheme that is intended to shift the market away from petrol and diesel cars and towards battery models by 2035. EV car sales targets rise annually from 22 per cent this year, to 28 per cent next year, and reach 80 per cent by 2030.
EVs accounted for 15.5 per cent of car sales in the first three months of the year, according to official figures. For vans, which have separate quotas, this year’s target is 10 per cent.
About 13 per cent of Stellantis car sales, which include the Peugeot, Citroën, Fiat and Jeep brands, in the UK are electric, while 8.6 per cent of its vans are battery models.
“The settlement as it is crafted today is a terrible thing for the UK,” Tavares said. “I think that the fact that they impose a ramp-up of [EV sales] makes sense. The problem is the magnitude.”
He added: “The consequence of this is that everybody will start pushing the BEV, pushing the metal into the market, which then totally destroys profitability, which then destroys the companies.”
The mandate was under consultation with the industry for more than 12 months before it came into force this year. During its drafting, several carmakers won key concessions, including being allowed to use significant reductions in overall CO₂ emissions to offset poor EV-only sales.
The concession is particularly beneficial to Toyota, which has two UK plants, as well as Ford, which also has significant UK operations.
Stellantis makes electric vans at Ellesmere Port for export, and some at its Luton plant as well. It is in talks with ministers about financial support to transform the Luton plant into an all-electric factory.
Tavares said that EVs are “better” cars, but that consumers are still put off by their higher prices and concerns over charging.
The government did not immediately respond to a request for comment.