As the EU threatens to fight the rising imports of Chinese electric cars with big new tariffs, the U.K., under “farcical” Net Zero laws, is set to do the opposite and force U.K. car makers to subsidise their Chinese rivals. The BBC’s Faisal Islam explains.
In a few weeks’ time the Government will introduce its Zero Emissions Vehicle (ZEV) mandate, designed to force carmakers down the path towards hitting targets to eliminate the sale of the combustion engine.
If a car company misses its target that 22% of its sales are electric, starting in January, it will either face fines of £15,000 per vehicle, or have to buy a surplus credit from a company that has sold lots of electric vehicles.
It happens to be the case that the Chinese-made import brands are mainly all electric.
The net result of all this, fear some in the car industry, is a system where existing U.K. manufacturers, including of hybrid cars, will pay thousands of pounds to subsidise electric imports.
Essentially, U.K. factories, which face competition from Chinese electric imports, could have to subsidise them. While this is not the intention of the policy it could be the inadvertent effect.
The Government has not yet published its response to a consultation on this that closed four months ago. The expectation in the industry is that sufficient flexibilities will be introduced to prevent this issue. But the system is just weeks away from being introduced. And it is clear that the general architecture of the ZEV mandate is designed to provide a carrot for electric importers, including from China, and a stick for actual producers of existing cars in the U.K.