UK delays ban on new gasoline and diesel cars to 2035

21 September 2023

Amidst the global fervor surrounding climate change, Britain makes headlines with a rather eyebrow-raising move. Prime Minister Rishi Sunak announced a five-year delay in Britain's ban on the sale of new gasoline and diesel cars and vans. Originally set for 2030, the ban now stands pushed to 2035.

Speaking from London, Sunak presented this change as a "new approach" to addressing environmental concerns. According to him, this revised plan will "ease the transition to electric vehicles." Citizens will still have the liberty to buy gasoline and diesel vehicles until the new deadline. And fret not, those fond of the rumble of a traditional engine can still buy and sell them in the second-hand market even after 2035.

For the optimists, the silver lining here is Sunak's confidence. He predicts that a significant majority of vehicles in the UK will transition to electric by 2030, courtesy of declining costs, without any direct governmental intervention. “At least for now it should be you, the consumer, who makes that choice, not the government forcing you to do it,” Sunak quipped.

Now, if you're thinking this move simply harmonizes Britain with its European neighbors, think again. While the delay aligns with the European Union's mandate for zero-emission new cars by 2035, critics argue that it's not an apples-to-apples comparison. Maria Bengtsson, EY U.K.'s Electric Vehicle Lead, points out that the UK and the EU are hardly "like-for-like." Unlike many EU jurisdictions, the UK lacks a similar demand-side incentive structure and infrastructure environment.

This decision has stirred quite a whirlwind in the automotive industry. Manufacturers like Kia expressed their disappointment, citing this shift as a potential wrench in complex supply chain negotiations and product planning. Ford, while emphasizing their hefty investment towards electrification, echoed the sentiment that the UK's 2030 target is a paramount catalyst for a greener future.

Meanwhile, Volkswagen emphasized the urgent need for "clear and reliable regulatory frameworks" to spur market confidence. But not everyone's seeing red. Toyota, for instance, lauds the move, viewing it as a practical step aiding industry and consumers in a transitional period.

Of course, there's also the economic side of the coin. With national elections lurking around the corner and voters grappling with high inflation and stagnant economic growth, this decision is a tactical move by Sunak to win some favor. He defends the change by stressing the UK's commitment to net zero emissions by 2050. He attributes this policy tweak to previous governments that, in his view, may have been a tad too hasty in setting net-zero targets without ensuring public backing.

The UK automotive sector has faced hurdles in securing substantial investments in electric vehicle manufacturing and battery plants. After initial delays, there are finally significant commitments from giants like Jaguar Land Rover-parent Tata Group and BMW decided to produce electric Minis in Oxford.

As with every coin, there are two sides to it. On the face of it, such a move is designed to ease the purported strains of the fast transition to electric vehicles. Manufacturing is just one side of this revolution, the other - probably even more important - side is the infrastructure. It requires unprecedented investments and the 2030 deadline meant big changes. With that kicked 5 years down the road, there is less pressure, and the status quo remains untouched for a while longer.

In reality, it means growing petrol and diesel prices for 5 more years, increased profits for oil companies for 5 more years, and much-needed electrical grid and charging infrastructure improvements pushed back beyond Rishi Sunak's responsibility. He won't be staying around until 2035 to reap the rewards of his misguided tactics, he'll be criticizing the new government from the comfort of the back benches by then.

The only hope is that the EV revolution plows on, driven by customers who tried an electric car and don't want to go back to gasoline or diesel. And while we are getting more and more choices when it comes to buying a new EV, the lacking infrastructure is primed to wreak absolute havoc with electric car adoption. Who knows, maybe that's the plan?

The electric vehicles were initially more popular than gasoline-powered ones in the early 20th century. But advancements in internal combustion engines and mass production techniques, like those by Henry Ford, shifted the automotive industry's focus away from electricity for almost a century. Norway, a country not even half the size of the UK in terms of population, boasts over 50% of new car sales as electric, effectively setting the gold standard for EV adoption.

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