Harsh net zero rules will force more car factories to close, industry warns
Overly ambitious sales targets and new taxes on electric vehicles (EVs) are putting more UK car plants at risk of closure, manufacturers have warned.
After UK production fell for a 12th successive month in February, the Society of Motor Manufacturers & Traders (SMMT) criticised Rachel Reeves for failing to support the industry during her Spring Statement.
The trade body said a lack of subsidies for drivers contributed to the latest 11.6pc drop in monthly production, claiming the decline would only worsen after new taxes were introduced on EVs next month.
Mike Hawes, the SMMT's chief executive, said: 'These are worrying times for UK vehicle makers with car production falling for 12 months in a row, rising trade tensions and weak demand.
'It was disappointing, therefore, to hear a Spring Statement that did nothing to alleviate the pressure on manufacturers and, moreover, confirms the introduction next month of additional fiscal measures which will actually dissuade consumers from investing.'
He added: 'Without substantive regulatory easements, our manufacturing viability remains at risk and the UK's transition to zero-emission mobility under threat.
'The market transition is not keeping pace with ambition and, while the industry can deliver growth – and green growth at that – it needs policies to deliver that reality.'
With EVs struggling to gain traction, the SMMT said the Government should take steps to bolster demand.
This includes reconsidering a policy change set to be introduced next month that will see EVs that cost more than £40,000 pay a higher rate of road tax.
The SMMT also said VAT on new battery electric vehicles should be halved.
The latest drop in production comes after Vauxhall owner Stellantis confirmed that its Luton plant would close next month, claiming that net zero rules were partially responsible for the decision.
In particular, bosses criticised the Government's ZEV mandate, which requires at least 28pc of cars sold by manufacturers to be electric.
Meanwhile, the latest SMMT figures revealed that more than half of the cars built in the UK in February went to the EU, with 20pc going to the US.
Overall production also fell to 82,186 cars in February, which was 10,787 fewer than last year.
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