The UK’s zero-emission vehicle (ZEV) mandate is significantly disrupting the automotive industry, particularly affecting traditional brands like Ford and Vauxhall. These companies are witnessing a sharp decline in market share as they struggle to meet electric vehicle sales targets mandated by the government. Specifically, under the current ZEV mandate, manufacturers must ensure that 22% of their sales in 2024 consist of all-electric vehicles. Non-compliance could lead to substantial fines of £15,000 per vehicle.
As a result of this pressure, some manufacturers are limiting the supply of petrol and hybrid cars, even though consumer demand for these models remains strong. Ford, which was once the market leader in the UK, has seen its market share fall to just 5.5%, trailing behind German competitors such as Volkswagen, BMW, and Audi, as well as South Korea’s Kia. Vauxhall, which has historically been Ford’s closest rival since the 1970s, is also struggling, with a market share of only 4.5%. This marks a stark decline from four decades ago when both brands collectively held nearly half of the UK’s motoring retail market.
Recent data shows that Ford’s new car sales have dropped by 23% compared to the previous year, while Vauxhall has experienced a 10% decrease. This decline is particularly significant given that the overall market has grown by 5.5% year-on-year. Robert Forrester, CEO of Vertu Motors, noted the supply constraints, stating that manufacturers are restricting the availability of petrol and hybrid cars to avoid fines, despite high consumer demand.
Looking ahead, industry insiders warn that the situation could worsen in 2025 when the ZEV mandate quota increases to 28% of all sales. Some manufacturers are already admitting they may not meet these rising targets. However, not all automakers are struggling; BMW is reportedly selling 30% of its cars in the UK as electric models and may surpass Tesla as the leading seller of zero-emission vehicles by the end of the year. Mercedes-Benz is also performing well, with around 25% of its sales being electric vehicles. Their success is largely due to a strong foothold in the company car and fleet market, where electric vehicle sales are bolstered by tax incentives and salary-sacrifice schemes.
In contrast, sales to private motorists have stagnated following the government’s decision to eliminate financial incentives, alongside the increasing capital costs of electric cars and the ongoing impact of inflation and rising interest rates on UK consumers. As the automotive landscape evolves under environmental regulations, traditional leaders like Ford and Vauxhall face significant challenges in adapting to the electric revolution while trying to maintain their market positions.
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