Event Review: SMMT Electrified 2025
Car manufacturers expressed their views about the UK electric vehicle (EV) landscape, and in particular the ZEV mandate, at the Society of Motor Manufacturers and Traders (SMMT) Electrified 2025 industry conference – and the clock is ticking for the government to take action (and this was before Trump’s tariffs announcement).
Although there was support for the overall principle of the ZEV mandate – intended to encourage increasing percentages of zero emission car and van sales each year from 2024 to 2035 – speakers from BMW, Kia, Ford and Nissan all said that more needs to be done to support manufacturers to meet the targets. BMW and Kia were amongst the most successful manufacturers in terms of their levels of EV sales in 2024, but despite this, both companies said it was a struggle to meet the ZEV mandate EV sales target of 22% – and things are likely to get even more challenging with the increased targets for sales of 28% in 2025 and 33% in 2026.
Manufacturers are currently waiting for the government’s response to the recent consultation about the ZEV mandate, specifically relating to ‘flexibilities’, and details about what hybrid technologies will be allowed between 2030 and 2035. Lilian Greenwood MP, Minister for the Future of Roads, also spoke at the SMMT Electrified event and said that the government’s response to the consultation would be in spring. But in the meantime, in April EVs will become liable for VED, or road tax, and also the ‘expensive car supplement’. From 1 April 2025, the standard VED rate for all cars will be £195 per year after the first year of ownership. Cars registered on or after 1 April 2025 with a list price of more than £40,000 will also pay an additional £425 from years two to six, so VED and the expensive car supplement would mean that drivers of EVs with a purchase price of over £40,000 will pay a total of £620 per year after year one, or £3,100 over six years.
The manufacturers, and Mike Hawes, SMMT Chief Executive, argued that the expensive car supplement should either be scrapped for EVs, or at least raised to a threshold of £60,000, because it hasn’t been increased since 2017 and it now covers many EVs that aren’t seen as ‘expensive’ cars. Paul Philpott, President and CEO, Kia UK Limited, said that the currently planned increase in April will result in electric cars being subjected to more of a tax increase than petrol and diesel cars, which he said is ‘perverse’ at a time when sales of EVs to private motorists are at a low level, and so more incentives are needed to encourage people to make the shift to EVs.
Manufacturers are due to be fined £15,000 for each car they sell within this year’s 28% ZEV mandate target that isn’t zero emission at the tailpipe. This is after UK manufacturers are said to have spent £4.5 billion on incentives in 2024. The SMMT argues that this isn’t sustainable.
One thing that all the OEM speakers agreed on was that the Labour government has been listening to the concerns of the industry, but it remains to be seen what it will do to alleviate the pain of the ZEV mandate (but it’s looking pretty likely that the government won’t be softening the expensive car supplement for EVs before it’s introduced in April). The SMMT says that purchase incentives such as a 50% reduction in VAT on new EVs would transform the market, along with greater charge point rollout and a reduction in the cost of charging through a VAT cut.
It was generally accepted that when EVs have price parity with petrol cars then private motorists will be more willing to make the switch. The good news is that this is starting to happen now, with the Vauxhall Frontera, and soon, the new Fiat Panda.
The UK’s charging infrastructure is always on the agenda at events such as SMMT Electrified, and this year was no different. Although the rate of installation of public charging has increased over the last year, there’s a poor perception of EV charging, particularly by motorists who haven’t yet made the switch to an EV – which is influenced by many stories in the media which aren’t representative of the typical experiences of EV owners.
One issue that all speakers were agreed on is that electricity is too expensive in the UK, resulting in public charging for the 40% or so of drivers who can’t charge at home being too costly to encourage them to switch to EVs.
Public charging for trucks was another important item on the agenda. After many years of speakers at conferences saying that we’ll never have electric HGVs, we now have electric HGVs – but very little public charging infrastructure. Grid connections were cited as a key reason that new ultra-rapid charging hubs can take up to five years to be built. So efforts are now being made to install charging infrastructure for trucks – and although it wasn’t covered at the event, public charging infrastructure for vans (and cars with trailers) also needs to be improved – another item for the government’s to-do list (in collaboration with industry).
How the UK sits in comparison to other global markets in terms of EVs was looked at by Ryan Fisher from Bloomberg. The summary was that China is ahead in a number of key areas such as EV and battery production (just as European battery manufacturer Northvolt has announced bankruptcy), resulting in a significant reduction in battery prices, which is good for global EV buyers – but the threat of tariffs is bad for global EV buyers (and for many others).
SMMT Electrified 2025 showed that car manufacturers, and their trade body, the SMMT, are genuinely concerned about some details around the ZEV mandate, as well as the imminent introduction of the expensive car supplement for EVs. They would like to see the government respond to the ZEV mandate consultation quickly, certainly before ‘spring’ – the response ‘date’ quoted by the government.
Read the full story at Green Car Guide
Paul Clarke
