The Labour government is facing mounting pressure to ease its ambitious electric vehicle sales targets, according to a significant new industry report. The call for a strategic pivot comes despite the looming 2035 ban on the sale of new petrol and diesel cars.
Report calls for strategic recalibration
The Policy Commission on Gigafactories has published a report urging ministers to adjust regulations to attract crucial investment into the production of EV batteries within the UK. The commission, launched last year by former Labour defence secretary Lord John Hutton, argues that the current path requires a "course redirection" to secure the future of domestic manufacturing.
Specifically, the report suggests softening the Zero Emission Vehicle (ZEV) mandate. This mandate currently requires that 80% of new cars sold in 2030 be zero-emission vehicles, scaling up to 100% by 2035. The commission recommends relaxing the 2030 target to between 50-60% to free up funding and focus for building gigafactories—the large-scale plants essential for EV battery production.
Industry consensus for change
In comments to the Financial Times, Lord Hutton emphasised the growing consensus for change within the automotive sector. "It’s not scrap everything, but recalibrate," he stated, assuring that such adjustments would not detract from the overall goal of vehicle electrification.
He stressed that "regulatory interventions have to be evidence based, not ideologically based," and warned that "a business-as-usual approach isn’t really going to cut it." Hutton described battery technology as "fundamental to the future of UK manufacturing," calling for a revitalised strategy to compete globally.
Government stance and new road tax plans
A government spokesperson responded by reaffirming the administration's commitment, stating: "Our commitment to transition to zero emission vehicles by 2035 is giving industry the certainty it needs.">
This debate unfolds alongside revelations about future taxation for electric vehicles. Following a consultation, a new pay-per-mile charge is slated for introduction from 2028. Under the proposed system:
- EV drivers would be charged 3p per mile, on top of other road taxes.
- This would add approximately £12 to a journey from London to Edinburgh.
- Hybrid car drivers would also be charged, but at a lower rate.
The scheme would require owners to estimate and pay for their annual road usage in advance, with year-end reconciliations leading to either a credit or a top-up charge.
The combined pressure from industry and the practicalities of new taxation models present a complex challenge for the government as it seeks to balance environmental ambitions with economic and infrastructural reality.
