Tesla has alerted the UK government that potential changes to electric vehicle regulations could adversely affect battery car sales and jeopardize the country’s carbon dioxide reduction targets. This warning comes from documents revealed by the Fast Charge newsletter, which covers the electric vehicle sector. The correspondence indicates that the company, led by Elon Musk, sought government support for the used-car market in submissions to a government consultation earlier this year.
In April, the Labour government faced criticism from electric vehicle manufacturers after it relaxed certain rules under the zero-emission vehicle (ZEV) mandate. This mandate requires carmakers to increase the annual sales of electric vehicles. However, the introduction of new loopholes has permitted manufacturers to sell a higher number of petrol and diesel vehicles. Critics have also pointed to new taxes on electric cars, introduced in the recent budget, as factors that could further diminish demand.
Carmakers such as BMW, Jaguar Land Rover, Nissan, and Toyota have expressed concerns regarding the ZEV mandate in their submissions to the spring consultation. They argue that the current rules hinder investment, as electric cars are being sold at a loss. In contrast, environmental advocates and brands focused on electric vehicle production contend that the existing regulations are effectively driving sales, with no carmakers facing penalties for sales in 2024.
Tesla emphasized that it is “essential” for the success of electric vehicle sales that the government refrains from implementing additional loopholes, referred to as “flexibilities.” The company cautioned that such changes “will suppress battery electric vehicle (BEV) supply, carry a significant emissions impact, and risk the UK missing its carbon budgets.”
The recent budget announcement by Chancellor Rachel Reeves further alarmed carmakers by introducing a “pay-per-mile” charge for electric vehicles starting in 2028. This measure is expected to diminish their appeal compared to more polluting petrol and diesel vehicles. On a positive note, the government also announced the extension of grants for new electric cars, a move welcomed by the sector.
Tom Riley, author of Fast Charge, commented on the situation, stating, “Just as the EV transition looked settled, the budget pulled it in two directions at once – effectively robbing Peter to pay Paul. If carmakers push again for a softer mandate, Labour only has itself to blame when climate targets slip.”
The majority of Tesla’s responses, along with those from Ford and Mercedes-Benz, were only secured through appeals under freedom of information laws, as these companies opposed the release of their submissions. Several sections of the documents were heavily redacted, revealing Tesla’s call for “support for the used-car market.” Tesla has not clarified whether this support would extend to grants.
In stark contrast, Ford and Mercedes-Benz have lobbied against stricter carbon dioxide regulations beyond 2030. Such measures would require them to further reduce average emissions, potentially allowing for the sale of more polluting vehicles for an extended period. Ford has criticized European governments for retracting support for electric vehicle sales, stating, “policymakers in many European jurisdictions have not delivered their side of the deal.”
Ford’s position has shifted; the company previously supported more stringent targets but is now concerned about competition from Chinese manufacturers, which benefit from lower production costs and lack a UK manufacturing presence.
Mercedes-Benz has proposed that the UK should reduce VAT on public charging from 20% to 5%, aligning it with domestic electricity rates. Additionally, the company suggested implementing a price cap on public charging rates.
Tesla has also advocated for prohibiting the sale of plug-in hybrid electric vehicles with a battery-only range of less than 100 miles after 2030. Such a limitation would exclude many popular models from the market. Both Ford and Mercedes-Benz have declined to provide further comments on these matters.
