Britain pushes back ban on new ICE cars; automakers slam delay

LONDON --  Britain will push back a ban on new gasoline and diesel cars and vans to 2035 from 2030, Prime Minister Rishi Sunak said, as he set out what he called a "new approach" to tackling climate change.

"We're going to ease the transition to electric vehicles. You'll still be able to buy petrol and diesel cars and vans until 2035," Sunak said in a keynote speech on Wednesday. "Even after that, you'll still be able to buy and sell them secondhand."

Sunak said he expects the vast majority of vehicles sold in the U.K. to be electric by 2030 without government intervention, due to falling costs.

"At least for now it should be you, the consumer, who makes that choice, not the government forcing you to do it it,” he said.

The delay will bring Britain in line with the European Union's plan to require new cars sold after 2035 to be zero emissions, effectively banning the sale of new gasoline and diesel models in the bloc that Britain left in 2020.

Automakers, which have already made key investment decisions in line with the 2030 target, criticized Sunak's decision to push back the target to 2025.

Kia, which has plans to launch nine electric models in Britain over the next few years, said it was disappointing to see a change in a policy the industry was working and investing toward.

The announcement "alters complex supply chain negotiations and product planning, while potentially contributing to consumer and industry confusion," a Kia spokesperson said.

Ford's U.K. head, Lisa Brankin, said: "This is the biggest industry transformation in over a century and the U.K. 2030 target is a vital catalyst to accelerate Ford into a cleaner future."

Brankin added: "We need the policy focus trained on bolstering the EV market in the short term and supporting consumers while headwinds are strong: infrastructure remains immature, tariffs loom and cost-of-living is high."

Ford has announced a global $50 billion commitment to electrification, supported by 430 million pounds invested in its U.K. development and manufacturing facilities, with further funding planned for the 2030 timeframe.

A Volkswagen U.K. spokesperson said: "We urgently need a clear and reliable regulatory framework that creates market certainty and consumer confidence, including binding targets for infrastructure rollout and incentives to ensure the direction of travel."

However, Toyota said it welcomed the move as it helps the industry and consumers adapt and that it "recognizes that all low emission and affordable technologies can have a role to play in a pragmatic vehicle transition."

Not like the EU

Analysts and executives said the government's pushing back of the 2030 target meant Britain risked losing recent momentum in the adoption of greener transport. It will also put off car buyers thinking of switching to EVs and disrupt plans by electric charge-point operators, they said.

"This delay will also put investment in EV infrastructure at risk, not to mention the wider market including battery, solar and green energy initiatives," said Adrian Keen, CEO of public charging network InstaVolt.

Sunak presented the policy shift as aligning Britain with the EU's similar 2035 ban on new combustion car sales, but an EY analyst said the two markets were "not like-for-like."

"The U.K. does not offer the same demand-side incentives or infrastructure environment as many EU jurisdictions," said EY U.K. Electric Vehicle Lead Maria Bengtsson.

U.K. 'far ahead'

With a national election expected next year, Sunak appears to be betting that scaling back some green policies will win over voters who are struggling with high inflation and stagnant economic growth.

Sunak said his government remained committed to its legally binding target of reaching net zero emissions by 2050, but he said the government could afford to slow its progress because it was already "so far ahead of every other country in the world."

He said he had been forced to change the policy because previous governments had moved too quickly on setting net zero targets, without securing the support of the public.

The U.K. car industry has been struggling to attract meaningful investment in EV making and battery plants, despite recent commitments by Jaguar Land Rover-parent Tata Group and by BMW to make electric Minis at its factory in Oxford.

Bloomberg and Reuters contributed to this report