Ford’s UK leader is urging the government to introduce consumer incentives of up to £5,000 per vehicle to increase the appeal of electric cars and assist the industry in achieving ambitious climate goals.
Lisa Brankin, chair of Ford UK & Ireland, stated to Sky News that offering direct support for consumers purchasing zero-emission vehicles is vital for the industry to remain economically sustainable and meet demanding net-zero targets.
Last week, under pressure from the industry, the government initiated a “fast-track” review of its Zero Emission Mandate (ZEV), which establishes requirements for the percentage of new vehicles that must be electric—22% for cars and 10% for vans this year.
Manufacturers assert that these targets are unrealistic and that a penalty of £15,000 for each non-compliant vehicle is excessively punitive. Vauxhall’s parent company, Stellantis, pointed to the ZEV as a reason for the recent announcement regarding the closure of its Luton plant.
During the launch of the Puma Gen-E, the electric version of its popular small SUV, at Ford’s Halewood facility in Merseyside, Ms. Brankin remarked that consumer interest has significantly lagged behind what was anticipated when the mandate was introduced.
“The mandate represents a very aggressive path to 2030 and the elimination of new petrol and diesel vehicles. To see a return on our investments as manufacturers—we have invested £380m here [at Halewood] and £2bn in Cologne—we need to sell electric vehicles. The challenge is that consumers are not transitioning as swiftly as we hoped.
“Our primary request is for direct customer incentives, possibly a scrappage program; we have suggested reducing VAT on electric vehicles. We need something to motivate customers to purchase EVs and stimulate the car and van sales that are crucial for the UK.”
When asked if the incentives would need to be in the range of £2,000-£5,000 to be effective, she said, “That’s a valid inquiry, but it would have to be in that ballpark. It must be significant.”
The Puma Gen-E is important for Ford as it is the company’s smallest and most affordable electric vehicle, starting at just under £30,000, making it more accessible to the mass market compared to its current lineup.
The Halewood facility has recently commenced production of the Gen-E power unit, which is utilized in both the Puma and the E-Transit Custom, the electric variant of Ford’s 60-year-old commercial vehicle. They claim it will now power the best-selling car and van in Britain.
This development occurs as the entire European automotive sector faces hurdles in transitioning away from internal combustion engines, including waning consumer interest, tough competition from China, and the looming threat of tariffs from a potential second Trump administration.
Ms. Brankin defended Ford’s shift towards electric vehicles, a transition that has not yet managed to regain its previous supremacy in the UK market for petrol and diesel cars.
She also pointed out that the government’s support for its plants in Dagenham, Essex, and Halewood pales in comparison to the company’s investments.
“The assistance we have received from the government is still considerably less than what we have invested in our business to facilitate the EV transition. For our business to be sustainable, it is essential that it becomes profitable going forward, allowing us to safeguard the jobs we have already created.
“We have an excellent range of electric vehicles; we just are not witnessing customers making the switch as quickly as we would prefer.”
On Tuesday, Stellantis, the owner of Vauxhall, announced the closure of a plant in Luton, jeopardizing 1,100 jobs, partially due to the EV targets.
Business Secretary Jonathan Reynolds commented in the House of Commons on Wednesday that Stellantis’s decision marked “a dark day for Luton.”
It follows Ford in reducing its workforce in the UK; last week, the company revealed plans to cut 800 jobs over the next three years, also partly due to the EV target alongside increased competition.
Ms. Brankin conveyed on BBC Radio 4’s Today program: “What we fundamentally need is government-backed incentives to urgently enhance the adoption of electric vehicles.”
She mentioned that Ford had invested “significantly” in the development and production of EVs, having allocated “well over” £350m to electrification efforts in the UK.
“So we must make it viable,” she stated.
Both companies have previously expressed uncertainty about their futures in the UK due to factors unrelated to EV targets.
Ford shuttered its Bridgend factory in 2020, eliminating 1,644 jobs, citing Covid-19 among the reasons, while Vauxhall’s former parent had indicated in 2019 that Brexit posed a threat to its Luton facility.
Additionally, some analysts have suggested that a shift toward luxury vehicles and away from more affordable options contribute to Ford’s difficulties.
Reynolds attributed the closure of Stellantis’s Luton plant to the past administration, asserting that Labour had “inherited a position of extreme frustration.”
He mentioned that there would be a “fast track” consultation regarding the enforcement of EV targets but reiterated Labour’s commitment to phasing out new petrol and diesel vehicle sales by 2030.
Shadow business secretary Andrew Griffith described the 2030 target as a “jobs killer,” stating that Stellantis’ decision was a direct consequence of government policy that is fundamentally unworkable for the industry.
The former Conservative government shifted the phasing out deadline from 2030 to 2035, while still imposing penalties for non-compliance.
Under the existing mandate, a certain percentage of the cars sold by companies must be classified as zero-emission.
This year, electric vehicles must represent 22% of a company’s car sales and 10% of its van sales.
Firms face a fine of £15,000 for each car sold outside of these requirements.
This target is poised to increase to 28% for cars and 16% for vans by 2025, with the regulations becoming stricter each year leading up to a full ban on new petrol and diesel car sales.
Labour has expressed its commitment to reinstate the 2030 target as part of its broader climate change agenda but will consult on the policy’s “direction of travel.”
There are allowances within the current system that permit manufacturers unable to meet the targets to purchase “credits” from those who can.
In practice, this means companies could acquire credits from manufacturers like Tesla or the Chinese firm BYD, which exclusively produce electric vehicles.
Manufacturers contend that the anticipated demand for electric cars has not materialized as expected when the regulations were conceived.
Consequently, to avoid penalties, they argue they must heavily discount new vehicles or subsidize competitors that only offer electric models, none of which have production facilities in the UK.
Electric vehicle sales have been on the rise, with one in every five cars registered in October being an electric model. However, industry insiders maintain that this trend is largely due to unsustainable discounting.
Reynolds expressed his “profound concerns” about the current operation of zero-emissions policies during a dinner organized by the Society of Motor Manufacturers & Traders (SMMT) on Tuesday.
“I don’t think the policies we’ve inherited, particularly regarding zero-emission vehicles, are functioning as anyone intended,” he stated.
He and Transport Secretary Louise Haigh met last week with car manufacturers to discuss the electric vehicle regulations.
Several possibilities have been proposed, such as enabling the transfer of sales credits between cars and vans and providing “credits” for British-made electric vehicles sold internationally.
The SMMT has urged immediate government action to protect the sector, warning that weak electric car demand and the need to meet sales quotas could severely impact business sustainability and employment.
Nissan, which manufactures electric vehicles at its Sunderland facility, has claimed that the current regulations are “undermining the business case for manufacturing cars in the UK, threatening thousands of jobs, and jeopardizing billions of pounds in investment.”
The government is encountering backlash from automobile manufacturers, who argue that the existing rules aimed at encouraging electric vehicle adoption are excessively stringent.
They indicate that consumer interest in electric cars has not met expectations, which has made it challenging for them to sell sufficient vehicles.
Ford stated that this issue played a role in its recent decision to eliminate 800 jobs in the UK.
Stellantis, the owner of Vauxhall, plans to shut down its van production facility in Luton, citing the new regulations as one contributing factor.
So, what measures could be taken to boost consumer purchases of electric vehicles?
1. Provide subsidies for costs.
Electric vehicles (EVs) tend to be pricier than their petrol or diesel counterparts, partly because they still represent a relatively small share of vehicle production, meaning economies of scale have not fully realized.
The government currently offers some financial assistance to reduce the cost of EVs. For instance, they are subject to a reduced rate of company car tax. Salary sacrifice schemes allow employees to lease cars at a lower cost through their employers, using untaxed income, which can lead to significant savings.
However, since the discontinuation of the plug-in grant for vehicles in 2022, there has not been a comparable incentive for individuals who cannot obtain a car through their employer. Industry experts believe this situation needs to change.
Automotive journalist Quentin Willson, who now leads the campaign group FairCharge, suggests that the government should explore “interest-free loans for used electric vehicles aimed at lower-income drivers and reduce VAT on new vehicles by half.” He believes this could be financed by lifting the current freeze on fuel duty.
2. Produce more affordable electric cars.
The cost of electric vehicles is decreasing, aided by reductions in battery pack prices. Despite significant fluctuations in the prices of metals used in their production, such as lithium and cobalt, battery pack costs have dropped by about 70% since 2015.
This decline has helped narrow the price disparity between electric and traditional vehicles. Earlier this year, Stellantis launched the electric version of its Frontera model at the same price point as the petrol hybrid model.
Finding an affordable electric car is not easy, as there is a lack of genuinely budget-friendly options available.
This is mainly because many manufacturers have chosen to focus on higher-end models that are likely to be more profitable. As Roger Atkins, the founder of Electric Vehicles Outlook consultancy, points out, “vehicles priced between £50,000 and £60,000 are not accessible to everyone”.
Nonetheless, change is on the horizon. The Dacia Spring was launched in the UK a few weeks ago, with a starting price of £14,995. The newly introduced Leapmotor T03 is only marginally more expensive, and the Chinese company BYD has announced plans to introduce its ultra-budget Seagull model to the UK next year.
3. Eliminate the confusion
The government has announced a ban on the sale of new petrol and diesel vehicles by 2030 – but will this really happen?
The original timeline for phasing out conventional vehicles was set for 2040 under Theresa May’s administration, but this was moved up to 2030 during Boris Johnson’s tenure and later postponed to 2035 under Rishi Sunak.
Industry insiders suggest that the shifting timeline has created mixed messages and confused consumers, leading many to postpone purchasing an electric vehicle until there is more clarity.
Melanie Shufflebotham, co-founder of the electric charging guide Zapmap, notes that numerous drivers are “uncertain about the timelines, worried about expenses, and have questions regarding charging.” She advocates for “a consistent, factual communication strategy” backed by the government.
4. Reduce VAT on public charging stations
Although the cost of using public charging stations can vary significantly based on the provider and the speed of charging, public chargers are generally pricier than charging at home.
This discrepancy is partly due to taxation. An electric vehicle owner charging at home will incur a VAT rate of 5% on the electricity they use, whereas they will face a 20% VAT rate when using public chargers. Those without the option of charging at home have no choice but to pay the higher rate.
The industry, EV supporters, and even a House of Lords committee have urged for the public charging rate to be lowered to 5%.
Consultant Roger Atkins describes the current policy as “divisive,” as it “benefits wealthier individuals who can charge their vehicles at home.”
5. Improve the public charging infrastructure
Surveys of potential electric car buyers consistently show that worries about charging infrastructure rank highly. People are concerned about whether they can locate a charger at a busy service station or in rural locations.
While the number of charging points is increasing, as of October this year, there were 71,459 charging points across the UK, located at 36,060 sites, reflecting a 38% rise from the previous year, according to ZapMap.
However, not everyone is satisfied. Reports from current owners about difficulties finding charging points, waiting in long lines, or arriving only to find the charger out of order are common.
As the number of electric vehicles on the road rises, a significantly larger number of charging points will be necessary. The government aims to have 300,000 chargers in place by 2030, but the current pace of growth is insufficient to meet this goal.
Local authorities are partly to blame, as they are responsible for approving planning applications for new rapid charging stations. According to Roger Atkins, the approval process simply takes too long.
Simon Smith from the charging company Instavolt agrees that bureaucratic hurdles are an issue. He believes that obstacles in securing grid connections for rapid charging stations pose a “critical barrier” to expanding the network.
“We require increased assistance to tackle planning delays, local council objections, and challenges related to grid connectivity,” he states.
Ford’s passenger vehicle lineup in the EU will be all electric by 2030
Ford is making a major advancement in its transformation in Europe by committing fully to its electric passenger vehicles and significantly expanding its electrified commercial vehicle offerings.
By mid-2026, Ford has pledged that all passenger vehicles in Europe will be capable of zero emissions, including all-electric or plug-in hybrid options, with a complete shift to all-electric by 2030. Likewise, Ford’s entire range of commercial vehicles will also be zero-emissions capable, featuring all-electric or plug-in hybrid options by 2024, aiming for two-thirds of its commercial vehicle sales to be all-electric or plug-in hybrid by 2030.
This announcement follows Ford’s report of returning to profitability in Europe during the fourth quarter of 2020 and its announcement of at least $22 billion in global investments for electrification through 2025, nearly doubling the company’s prior plans for EV investments.
Stuart Rowley, president of Ford of Europe, stated, “We have successfully restructured Ford of Europe and achieved profitability in the fourth quarter of 2020. We are now moving towards an all-electric future in Europe with innovative new vehicles and a superior connected customer experience.” He added that they anticipate maintaining strong momentum in Europe this year and staying on track to achieve a six percent EBIT margin as part of Ford’s initiative to revive its global automotive operations.
Central to Ford’s transformation in Europe over the past two years involved a $1 billion enhancement of structural costs, addressing weak-performing markets, creating a more focused vehicle lineup across three customer-centric business groups, and forming partnerships aimed at fostering growth and improving profitability across the company.
Ford led the commercial vehicle sales market in Europe for the sixth consecutive year in 2020. The expansion of Ford’s commercial vehicle division is vital for its profitability in Europe, bolstered by new products and services, collaboration with a wide network of commercial vehicle converter partners, and synergies from Ford’s strategic relationship with Volkswagen as well as its joint venture with Ford Otosan, facilitating cost-effective vehicle development and sourcing.
Further growth in the commercial vehicle segment will be supported by an ecosystem centered around connected services co-created with customers, aimed at enhancing their experiences and helping their businesses flourish. This includes services such as FordPass Pro for fleets of up to five vehicles and the establishment of Ford Fleet Management, developed in partnership with ALD Automotive last year to optimize productivity for fleet customers looking for tailored services to ensure their vehicles remain operational.
Recently, Ford and Google announced a new collaborative initiative, labeled Team Upshift, aimed at driving innovative, data-driven opportunities. This unique collaboration, coupled with Ford’s in-house capabilities, will reshape ownership experiences and services for both the passenger and commercial vehicle customers.
Leading the way in Ford’s shift towards electric vehicles is a new $1 billion initiative to upgrade its vehicle assembly facility in Cologne, Germany, which is one of Ford’s largest manufacturing sites in Europe and the base for Ford of Europe. This investment will transform the current assembly operations into the Ford Cologne Electrification Center dedicated to electric vehicle production, marking Ford’s first such facility in Europe.
Ford also confirmed that its first volume all-electric passenger vehicle for the European market will be manufactured at this facility starting in 2023, and there is consideration for producing a second all-electric vehicle there as well.
Rowley commented, “Our announcement today regarding the transformation of our Cologne facility, which has been the center of our operations in Germany for 90 years, is one of the most significant decisions Ford has made in over a generation. It emphasizes our commitment to Europe and a forward-looking approach with electric vehicles central to our growth strategy.”
Martin Hennig, chairman of the General Works Council of Ford-Werke GmbH, stated, “The choice to designate the Cologne production and development site as Ford’s e-mobility center in Europe sends a strong message to the entire workforce. It provides a long-term outlook for our employees and motivates them to actively participate in shaping this electric future.”
Rowley concluded: “We will provide an outstanding selection of electrified vehicles, along with customer-oriented digital services and experiences, enabling our customers to embark on the journey towards a fully electric future, beginning now with the launch of the all-electric Mustang Mach-E. This, combined with our prominent commercial vehicle business, will lay the foundation for a sustainably profitable Ford operation in Europe.”
Further details regarding Ford’s electrification strategy and the transformation of the Cologne facility will be disclosed.
