FLASH NEWS
US tariffs/Britain to ease electric car rules
2025-04-07 15:57:06 / BOTA
The government has announced a relaxation of electric vehicle (EV) sales targets to help the car industry, in the face of trade tariffs from the US.
A ban on the sale of new petrol and diesel cars will still come into force in 2030, but manufacturers will now have more flexibility on annual targets and face lower fines.
Transport Secretary Heidi Alexander told BBC Breakfast that her changes were not a "silver bullet" but part of the solution to respond to the US tariffs.
Opposition parties in the UK said Labour's measures would not be enough to boost the car industry.
US President Donald Trump has imposed a 25% tax on cars imported into the US, which is a major export market for the UK motor industry.
It came into effect last week and is separate from a 10% tax on almost all UK products announced by Trump on Wednesday.
A consultation on changes to the government's EV targets ended in mid-February, but Alexander told the BBC that the government had accelerated the process of introducing them in response to the tariffs.
The government said it had worked with UK car manufacturers to "strengthen its commitment to leaving", introducing "practical reforms to support the industry to meet this ambition".
Currently, 28% of new cars sold in the UK this year must be electric, a target that will increase every year until 2030.
But manufacturers will now be given more freedom in how they meet their annual targets - meaning if they don't sell enough EVs in one year, they can make up for it by selling more the following year, for example.
In addition, the £15,000 fine for a vehicle sold that does not meet the latest emissions standards will be reduced to £12,000.
Meanwhile, a ban on the sale of hybrid vehicles - which combine a petrol or diesel engine with an electric motor - has been confirmed from 2035.
Smaller British firms such as Aston Martin and McLaren will be allowed to continue selling petrol cars beyond the 2030 deadline.
As part of the changes, the car industry will also be given £2.3 billion in tax breaks.
The ban on sales of new petrol and diesel cars was extended until 2035 under the previous Conservative government, but Labour promised to reinstate the 2030 deadline in its manifesto for the 2024 election.
Auto industry executives have previously warned that drivers were not switching to electric vehicles at the rate needed to meet the deadline, due to the cost of purchasing private cars and the lack of charging point infrastructure.
Sir Keir said the measures would "drive growth that puts money in the pockets of working people" and ensure "home-grown firms" can export UK-made cars around the world.
Mike Hawes, chief executive of the Association of Motor Manufacturers and Traders, said the changes are "much needed".
However, Robert Forrester, chief executive of car dealership chain Vertu Motors, told the BBC that there was "a lot of talk in the announcement, but it doesn't really address the key issues".
He said manufacturers would continue to pay billions in fines, despite the reduction to £12,000 per car.
"Nothing has really changed here - it's just confusion," he said, adding: "The government has gone for hope over reality."
Shadow business secretary Andrew Griffith described the measures as "half-baked" and repeated Conservative leader Kemi Badenoch's claim that "net zero by 2050 is impossible".
The Liberal Democrat Transport spokesman called for "better incentives" for consumers to buy electric vehicles and said the changes "will not be enough to protect the sector from the impact of Trump's damaging tariffs".
The US is the second largest export market for the UK car industry, after the European Union.
Coventry-based carmaker Jaguar LAND Rover announced on Saturday that it will 'pause' all April deliveries to the US while it works to "address new trading conditions".
A special 10% tariff on imports into the UK came into effect on Saturday, with higher rates in force for several other major economies.
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