Forget Brexit – Net Zero is the real threat to the car industry

Extreme green targets pose an existential threat to UK carmakers

For years, ardent Remoaners have been putting all of the problems facing Britain’s car industry down to Brexit.

Car manufacturers faced ‘death by a thousand cuts’, wailed the Guardian a few months after the Leave vote. ‘Brexit will leave the UK’s car industry running out of road’, proclaimed the New European in 2018. The UK car industry had ‘dodged disaster’ in December 2020 thanks to the signing of a trade deal with Brussels, insisted Bloomberg, but still the new arrangements were said to be ‘too little, too late’.

Of course, the economic impact of Brexit was always wildly exaggerated. Yet now that a genuine threat to car manufacturing has arrived, what do the Remain-leaning elites have to say? Nothing.

The threat in question is Net Zero – specifically, the government’s zero emission vehicle (ZEV) mandate. This regulation insists that 22 per cent of the cars produced in Britain this year will be electric vehicles (EVs). This must rise to a staggering 80 per cent by 2030 and 100 per cent by 2035. Manufacturers of commercial vehicles, like vans and lorries, are subject to similar rules.

Most business leaders in the auto-manufacturing sector have said little about the ZEV mandate. But Carlos Tavares, chief executive of Stellantis, has sounded the alarm on these extreme targets. Stellantis has long made Vauxhall cars in Ellesmere Port in the Wirral, as well as both Peugeot and Fiat vans in Luton. Last week, Tavares warned that the ZEV was ‘terrible’ for the UK and that it would ‘kill’ British carmakers. Given that Stellantis employs 5,000 workers, his warning needs to be taken seriously.

For every petrol or diesel car that is made above the output limit imposed by the government, manufacturers will have to pay a whopping £15,000 fine. For conventional vans, the sum exacted will be an even harsher £18,000. These draconian penalties will mean huge losses for carmakers or higher prices for car-buyers – or both.

The political class sees the ZEV as a modern, progressive and necessary measure to achieve Net Zero carbon emissions. The truth, however, is that it follows in a long line of technocratic stupidity. In 1928, 1933 and 1938, with his first three Five Year Plans, Joseph Stalin dictated production and investment targets for the Soviet Union. None was ever met. Decades later, UK prime minister Tony Blair’s ‘Delivery Unit’, launched in 2001 to monitor and accelerate public-sector reforms, achieved a little more success. Still, according to Michelle Clement, a researcher in residence at 10 Downing Street: ‘The Delivery Unit, and wider government approach to targets and delivery, was seen as controversial by some who thought it contributed to an inflexible, target-led culture of top-down policymaking.’

The Conservative Party loves to posture against this target mentality. In 2022, both Liz Truss and Jeremy Hunt denounced top-down targets – in housebuilding and in the NHS respectively – as ‘Stalinist’. Yet the Tory government has continued to embrace top-down targets when it comes to Net Zero.

Despite promising to ‘rethink’ how government works when he takes office, Keir Starmer will almost certainly stick to this approach. Indeed, Labour is proposing to end the production of petrol and diesel cars five years ahead of the Tories.

Worse still, Labour’s war on the car doesn’t end with the ZEV. In London, mayor Sadiq Khan has introduced and expanded the hated Ultra-Low Emission Zone. Local Labour councils across the UK have embraced Low Traffic Neighbourhoods. Some of its local authorities are reportedly ‘plotting’ to introduce road-pricing, which would involve taxing drivers based on how much and how often they drive on public roads. By making driving more difficult and expensive, Labour’s eco-policies are only adding to the woes of the UK car industry.

As long as our political class remains in the grip of climate apocalypticism, then car manufacturers will be in trouble. Both Labour and the Tories see our car industry as a problem to be managed, as a cause of environmental disaster, rather than a source of growth, wealth and jobs. This is the real threat to Britain’s carmakers.