Ford, Toyota face potentially large EV fines in U.K.

LONDON -- Ford and Toyota could face some of the highest fines in the U.K. next year under new rules enforcing minimum electric-vehicle sales, according to market analysts Dataforce.

Next year sees the start of the ZEV [zero emission vehicle] mandate in the U.K. under which sales of electric or fuel cell vehicles must reach 22 percent of registrations in the first year or automakers will face fines of 15,000 pounds ($15,829) per car or 9,000 pounds per van.

The targets get tougher annually, rising to 28 percent in 2025, 80 percent in 2030 and 100 percent in 2035.

Fines would reach 2.4 billion pounds ($2.91 billion) based on the 18 percent EV share in the U.K. in the 12 months to the end of September, Dataforce says.

Ford with just a 2 percent EV share and Toyota at one percent share over the 12-month period would pay the biggest fines if they do not drastically improve their EV sales given their market size, Dataforce calculated.

Other automakers in trouble include Suzuki and Land Rover at zero EV sales in the 12-month period, while Mazda only managed 3 percent.

Those with work to do also include Nissan, Fiat and Citroen, which were all at 12 percent, Skoda at 13 percent, and Vauxhall, Peugeot and Mini at 15 percent.

Automakers have a range of tactics allowable under the scheme to offset any shortfall. Companies are not permitted to ‘pool’ with anyone not under the same corporate umbrella, unlike with the corporate average fuel economy (CAFE) targets in the European Union and U.K.

However, they can buy credits from those with a higher percentage of EV sales, borrow against future expected over-compliance and convert any overshoot in their CAFE targets into credits, which in effect rewards plug-in hybrid sales.

Brands that do not need to worry about the new ZEV mandates, according to Dataforce figures, include MG at 41 percent EV sales in the 12 months to the end of September, Cupra at 31 percent, Porsche at 29 percent, BMW at 25 percent and Mercedes at 22 percent.

All-EV makers such as Tesla and Polestar are in a position to capitalize on their sales numbers and sell credits.

Volume automakers in particular will need to boost sales of EVs, despite the available offsets, Dataforce said.

Three quarters of all EV sales in the U.K. are to fleets thanks to company car incentives, according to figures from the SMMT industry group.

Private sales, meanwhile, have fallen according to September figures, but that needs to be reversed. “To avoid these fines, manufacturers will need to convince more private buyers to opt for electric,” said Benjamin Kibies, analyst at Dataforce.

Potential electric car buyers received mixed messages from the U.K. government in September on EVs after Prime Minister Rishi Sunak pushed back a decision to ban most combustion engine cars from 2030 to 2035, but then ratified the ZEV mandate that sets out tougher timeline for the move to EV sales than the EU.

“I think the combination of the Government’s 2030 ban move plus the retained ZEV mandate puts the OEMs in a tough spot,” Richard Peberdy, U.K. Hhead of automotive and mobility at consultants KPMG, told Automotive News Europe.