Road to 2030: Understanding the legislation behind the 2030 ban

Johnson government needs to formulate a fuel tax replacement

The upcoming 2030 ban on new petrol and diesel cars will transform UK motoring on a scale never seen before. This story is part of a wider analysis of the challenges faced by consumers, government and the automotive industry, what needs to happen, and how such drastic changes can be achieved over the next decade.

*Read the rest of this series here: Countdown to year zero - what needs to happen by 2030?*

*By acting earlier than the US, Europe and Japan, are we putting out industries at any kind of competitive disadvantage?*

Business tends to go where business is, so the chances are that any UK-based manufacturers or suppliers will continue to make and supply whatever is most profitable for as long as they are able. With most studies reckoning on EVs accounting for 30% of global sales by 2025 and a majority of sales by 2030, the UK’s move is unlikely to undermine competitiveness and might even spur investment in this new, long-term tech earlier than planned.

*How will the government keep to such an aggressive timetable without the feeling of coercion overtaking everything?*

The problem with the hard deadline is that the government needs to prove that EVs aren’t just a positive, practical choice for some or even most motorists but for all of them. And while the sale of used ICE cars for at least 15 years beyond the 2030 deadline seems likely, telling some people that they either have to buy second-hand or accept compromises is a tough political agenda to pursue, especially if it disadvantages the less well off or those living in more remote locations.

Of course, new EV costs and capability will improve considerably in the intervening decade – after all, they have significantly in the past 10 years without there being the R&D spend or impetus that exists today – and for many people, the barriers that exist to ownership today will be overcome.

But it’s hard to imagine that EVs will be as attractive as a petrol or diesel-engined car is today for everyone, and it’s these cases – however fringe – that will need to be addressed. ‘Like it or lump it’ has never been a great look politically, yet it’s something that the hard deadline inevitably risks the government having to impose.

*Is the government likely to promote its aims by majoring on incentives or on penalties?*

As always, there will be an element of carrot and stick. Today, the former is prevalent, with the plug-in car grant (PiCG), road tax breaks and congestion exemptions, plus of course the relative cheapness of charging compared with refuelling.

However, reductions in these incentives are inevitable, with grants and tax cuts certain to ease over time and road charging firmly on the agenda to replace fuel tax, removing another saving from the mix. All of this may be emotionally charged, but there’s a stark truth to the fact that motorists have long been a cash cow for governments that they won’t be giving up in a hurry. As ever, personal mobility will come at a high price.

What’s more, with the cost-saving benefits washed away, it’s not inconceivable that punitive taxes could be an option in order to force EV uptake. France’s Malus tax, for example, hits the purchase of vehicles that emit 133g/km of CO2 or more, up to the tune of about £33,000 for the biggest polluters. Would you still lust after a hot hatch if 20% was added to its price as an environmental surcharge?

*What incentives are likely?*

The PiCG was introduced in 2011, offering EV buyers an incentive of up to £5000 to switch to a zero-emissions vehicle. It has come down in steps and last year was reduced to £3000 or 35% of the vehicle’s sticker price, whichever is lower – a level that has been guaranteed until the 2022/23 financial year begins. There’s no grant available for buying a plug-in hybrid any more.

The likelihood is that the cash-strapped government will reduce these grants over time and use more punitive measures to encourage uptake, although the industry remains hopeful that a more positive stimulus package will be possible.

*What incentives would the industry prefer?*

SMMT boss Mike Hawes has been pushing for a more generous incentive to the PiCG to be put in place following the 2030 announcement, reasoning that even the current levels of exponential growth will not be enough to give EVs a 10% market share of new car sales until around 2022.

“It’s a speedy transition, and something like the removal of VAT on electric vehicles would accelerate uptake and send a clear message to consumers,” said Hawes.

Coupling the removal of VAT with the PiCG would put the UK’s EV incentive on a par with the most generous on offer in Europe, which are currently led by France and Germany.

*What incentives would consumers prefer?*

Polling of What Car?’s car-buying audience has consistently highlighted that people are more likely to be swayed to buy low-emissions vehicles not for their environmental savings but for their financial ones – be it lower road tax, free congestion charge or lower running costs. The power of a financial incentive should not be lost, therefore.

The ideal scenario for driving change would be for any incentive not just to bridge the gap in cost between a combustion-engined car and an EV, but to put the latter at an advantage, especially in these early years where there is a perceived – and for some real – difference in the capability and practicality of an EV versus an ICE car.

*Is there any governmental perception of the risk in forcing particular technologies on the motor industry, rather than setting targets and letting engineers achieve them?*

If there is, it’s pushed far to the fringes of policy, with electrification now the only goal. What’s more, with the environmental lobby’s voice being heard loudly, any efforts to sway that agenda are being swiftly and robustly kicked aside as being driven by legacy car makers lobbying to delay change as they struggle to adapt their business models to the new reality.

It’s a fact that, today, environmental leadership is a standard whereby all developed world leaders are being judged, and any wavering or altering of the course will require a significant shift in scientific position. True, diesel went from favoured fuel to demonised one in short order (ironically, arguably against the scientific evidence highlighting its benefits in some circumstances), and a decade is a long time in politics, but it seems unlikely.

*Do those at the heart of government see the need for a minister responsible for all of this?*

It’s hard to ascertain what’s understood; this is a government that has famously and repeatedly struggled to express an understanding of the difference between a plug-in hybrid and an EV, after all, even with Grant Shapps, transport secretary since 2019, famously espousing his love of his Tesla Model 3 regularly.

However, there’s no doubt that pressure is being brought to bear for such a role to be created, and there’s an undercurrent of belief that it could happen once there’s a better understanding of the practical challenges of delivering against the 2030 headline.

*Is there any remaining perception in government of the benefit the car industry has brought and can bring to UK jobs and the economy?*

The most senior figures in the car industry say so, with even the archest cynics having applauded the dialogue of recent months. To have them on board publicly and privately is telling, given both the imposition of the 2030 deadline and the value placed on fishing over automotive in Brexit negotiations, despite their relative financial values to the country (£446 million versus £49 billion, according to ONS).

But that respectful stance only goes so far. What the car industry lacks at present is a champion in government. Greg Clark, business secretary until mid-2019, was an ardent and prominent supporter of it, but he was undone by his Brexit stance. Alok Sharma in comparison appears to go through the motions, although it’s also fair to say that he has had plenty more to deal with over the past 12 months. Now, however, is the time to step up.

*Having done so much recently to bash the automotive industry, is there any feeling in government that the industry now needs a level road to success?*

Given the dramatic change that’s required to make 2030 a reality, it’s far more likely that there will be constantly changing goalposts than any kind of stability, beyond the one certainty of now having fixed end dates for the sale of new ICE cars.

While America’s see-sawing policy from pro-oil Donald Trump to the more environmentally conscious Joe Biden is an extreme example, the rollercoaster ride continues, and we live in a world where dramatic political swings – forth and back – are now part of everyday life.

*Is there any likelihood of back-tracking on 2030?*

Extremism is still rising, and Trump has shown how a populist vote can move the perceived status quo. However, it seems unlikely, given his unique talents are now back on the sidelines, global environmental goals and the fact that the barriers to electrification are being washed away or debunked, from the ethics of battery mining and battery recycling to range anxiety and whether there will be enough chargers.

Perhaps the biggest risk is not whether the end goal is achievable but rather that it needs careful management to get there. As such, any deviation from the path is likely to be a failure of government, and no politician in power will want to admit that.

*READ MORE*

**Countdown to year zero: what needs to happen by 2030**

**Official: Government to ban new petrol and diesel car sales in 2030**

**The UK's 2030 petrol and diesel ban: Autocar’s response**