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Britain’s electric vehicle policy is “terrible” and threatens to bankrupt automakers, the head of Vauxhall owner Stellantis warned on Thursday.
Carlos Tavares said the UK’s quota scheme, which requires manufacturers to meet annual electric vehicle sales targets, was set at “twice the natural demand of the market” and would mean carmakers would have to sell vehicles at a loss to avoid fines to avoid.
“To survive, companies have to be in the black,” he said. “I won’t sell cars at a loss.”
He had on Wednesday called on British Transport Minister Mark Harper to make the targets easier to achieve by allowing car manufacturers to count electric van sales and exports of electric vehicles towards the targets, he told reporters.
Unlike reintroducing consumer incentives, which the government has scrapped, this measure would cost taxpayers nothing, 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 Chinese-style quota system in place that aims to shift the market from petrol and diesel cars to battery models by 2035. Electric car sales targets will increase annually from 22 percent this year to 28 percent next year, reaching 80 percent by 2030.
According to official data, electric vehicles accounted for 15.5 percent of car sales in the first three months of the year. For vans, for which separate quotas apply, the target this year is 10 percent.
Around 13 percent of Stellantis cars sold in the UK, which includes the Peugeot, Citroën, Fiat and Jeep brands, are electric vehicles, while 8.6 percent of vans are battery models.
“The regulation as it stands is a terrible thing for Britain,” Tavares said. “I think the fact that they are mandating a ramp-up [EV sales] makes sense. The problem is the scale.”
He added: “The consequence of this is that everyone will start pushing the BEV, pushing the metal into the market, which then completely destroys profitability, which in turn destroys the companies.”
The mandate was consulted with the industry for more than 12 months before it came into effect this year. During drafting, several automakers received key concessions, including permission to use significant reductions in overall CO₂ emissions to offset poor sales of pure electric vehicles.
The concession will particularly benefit Toyota, which has two plants in the UK, and Ford, which also has significant branches in the UK.
Stellantis makes electric vans for export at Ellesmere Port, and some at its Luton factory. It is currently negotiating with ministers about financial support to convert the Luton factory into an all-electric factory.
Tavares said electric cars are “better” cars but consumers are still put off by their higher prices and concerns about charging.