Labour to Reinstate 2030 Petrol and Diesel Car Ban
The future of UK transport is once again in the spotlight, with the Labour government pledging to reinstate the 2030 ban on the sale of new internal combustion engine (ICE) vehicles - i.e., petrol and diesel cars. This will be a significant move, not just for the environment, but for the UK’s commitment to leading the charge towards a greener and more sustainable future. Labour hasn’t formally announced this change yet, but it was included in their manifesto. Both This is Money confirmed it, supported by comments from a Department for Transport (DfT) spokesperson.
In September 2023, the UK Government under the Conservative Party changed its rules about when new petrol and diesel cars can be sold. They pushed back the deadline from 2030 to 2035. This adjustment meant the UK was aligned with the EU and other global markets, mandating that all new cars and vans must be electric by 2035. This directive forms a crucial part of the broader initiative aimed at combating climate change, not only within the UK but also on a global scale.
At The Electric Car Scheme, we understand that every person wants to make choices to achieve a Net Zero future. People are limited by information, access, price and complexity - all of which are slowing down progress globally. The pace of achieving Net Zero is a huge problem because each tonne of carbon emissions goes on to contribute to climate change for centuries. The plan to re-instate the 2030 ICE ban appears to be a big step in the right direction, especially because of how well salary sacrifice schemes work for electric cars.
In this blog, we’ll explore what the 2030 deadline means, how it could shift public behaviour, and its implications for UK companies supporting their employees on the path to Net Zero.
The Importance of the ICE Ban
The ICE phase-out is more than just a date on a calendar; it’s a crucial milestone in the UK’s journey towards Net Zero. By setting this deadline, the government is sending a clear message: the future of transport is electric and the switch needs to happen sooner rather than later. This move will accelerate the adoption of EVs, encourage investment in charging infrastructure, and drive innovation in battery technology.
As aforementioned, the Conservative Government moved the timeline of the ban from 2030 to 2035 in what was described as “a new approach to achieving net zero.” Rishi Sunak gave ownership back to the consumer:
“But I also think that at least for now, it should be you, the consumer that makes that choice, not the Government forcing you to do it, because the upfront cost still is high, especially for families struggling with the cost of living.”
This further highlights the high upfront costs of EVs and how making sustainable choices often comes with expenses that not everyone has the privilege to afford. Many people in the automotive industry felt frustrated, seeing it as a step backwards in terms of progress.
It will come as no surprise that petrol and diesel cars are one of the largest emitters in the UK, with the average petrol car producing 164 grams of CO2 per kilometre and diesel cars producing 170 grams of CO2/km. Under a Labour Government, it seems this policy will revert from 2035 to 2030, the original plan. This is great news, as it will help the UK meet Net Zero targets and significantly shape the future of travel in the country.
This policy change signals that it’s time to start planning for a future without ICE vehicles, with the 2030 deadline offering a clear timeline for making the switch. The most affordable way to transition to an electric car is through EV salary sacrifice - an employee benefit that all companies can offer. This allows employees to save significantly on Income Tax and National Insurance by paying from their pre-tax salary.
What Will Labour’s 2030 Plan Include?
We know the 2030 ban will mean new petrol and diesel cars will not be able to be purchased after 2030. However, plans for mild hybrid and plug-in hybrid electric vehicles (PHEV) and ICE vans are yet to be announced.
What the Reinstatement Means for the UK’s EV Market
With the reinstatement of the 2030 phase-out, we can expect to see a surge in demand for electric cars. This is great news for the UK’s EV market, which is already one of the fastest-growing in Europe. More EVs on the road means more charging stations, better infrastructure, and greater innovation in the industry.
Despite the back and forth between dates, according to This is Money, many manufacturers are likely to be relieved to see the original date restored because of the time, planning and investment in the original 2030 date. Matt Galvin, UK Managing Director of Swedish EV brand Polestar told This is Money how the 2030 ban impacts EV manufacturers:
“What vehicle manufacturers need is certainty to support product lifecycle planning. While we welcome a faster transition to zero tailpipe emissions, combating poor air quality and delivering on the UK climate change ambitions, it requires an urgent focus on the imbalance between incentives to stimulate private consumer demand and penalties for the manufacturers. ”
What Does This Mean for The ZEV Mandate?
The ZEV (Zero Emissions Vehicle) Mandate was introduced in January 2024 and was designed to aid the transition between the UK’s new car and van markets to zero emissions by 2035. The Mandate sets yearly targets to help guide market developments, with the following goals:
2024: 22% of cars and 10% of vans sold must be electric,
2030: 80% of new cars and 70% of new vans sold must be zero-emission,
2035: 100% of new cars and vans sold must be zero emission.
If these goals were not met, manufacturers would expect to receive a fine.
The mandate also includes a bonus-only mechanism that may allow manufacturers to relax their overall CO2 target by up to 5% if they register above a set percentage of ZLEVs each year. A criticism of the ZEV Mandate could force manufacturers to scale back their presence in the UK and focus on other markets.
The moving of the goalposts for the ban on sales of petrol and diesel cars will mean the ZEV Mandate will need to be adjusted or eradicated.
What Does The Ban Mean For Drivers in the UK?
Everyone looking to buy a new car after 2030 will have to choose an EV. Electric cars are becoming more affordable as more manufacturers enter the EV market, offering a wider range of choices—there’s now an EV for everyone. The used electric car market is also growing, making EVs more accessible and reducing the upfront cost barrier. Additionally, the running costs of an electric car are significantly lower than those of fueling a petrol or diesel vehicle.
Despite the new 100% tariff on Chinese EVs introduced by the US, the UK government would do well not to follow suit and instead embrace the more affordable options. As aforementioned, our research shows that for the majority of Brits (68%) affordability is the biggest barrier to getting into an EV. If the UK government does introduce a tariff on the cheaper Chinese EVs, this could alienate people who are keen to make the electric transition.
A great example of this is what we at The Electric Car Scheme call “Electric Car Day” - the day when a petrol driver has spent more on fuel than an electric car driver will spend all year. This year, it was on July 15th. We analysed the annual fuel costs for the average UK driver travelling 7,400 miles a year, estimating £1,268 for petrol drivers and £680 for electric car drivers. This means that by mid-July, a petrol driver will have spent more on fuel than an EV driver will in an entire year. Depending on your EV model and when you charge it, this crossover point could come even earlier; for instance, a Tesla Model Y Long Range charged on an off-peak tariff could reach this point as early as March 10th!
There are still many EV sceptics, and much work remains to bring people around to the idea of driving electric. However, it’s truly a great alternative, especially knowing that by making the switch, you’re also helping to save the planet!
At The Electric Car Scheme, we strive to make the transition to an electric car easier and more affordable than ever. Earlier this year, we launched our used electric car salary sacrifice offering, allowing employees to save 30-60% on the already subsidised price of a used EV. These vehicles are also available for fast delivery, and there is a wide selection of used electric cars to choose from. This offers a fantastic opportunity to get into an EV, making it the most budget-friendly option!
What About The Fuel Tax Subsidy?
Fuel tax has been frozen since 2011, at an estimated total cost to the treasury of £66 billion, keeping fuel cheaper and carbon dioxide production high.
Transport is the UK’s number 1 emitter of the greenhouse gas, making this a costly, unhealthy and environmentally damaging policy. The government could help plug the funding gap that has been a key message over the past month or so by getting rid of this freeze. Not to mention the cost to the NHS of poor air quality and extra funding freed up by ending this subsidy. Introducing a levee on aviation fuel would also increase the tax take and help tackle climate change.
A Commitment to a Greener Future
At The Electric Car Scheme, we believe reverting the ICE ban from 2035 back to 2030 is great and is a positive step to accelerating the journey to Net Zero. However, we are cautious about what this means and the depth of the pledge.
Here’s what CEO and Co-Founder at The Electric Car Scheme, Thom Groot thinks of the reinstatement date:
"The reinstatement of the 2030 deadline for 100% zero-emission vehicle sales is welcome news to achieve Net Zero, but more will need to be done to ensure that it is a realistic target, not just an empty promise. This needs to come from policy to back this up - and involves both a "carrot and stick approach" - not just stick."
The 2030 phase-out is a critical step in the right direction, and it’s up to all of us - government, businesses, and individuals - to ensure it’s successful. By embracing electric vehicles, we’re not just reducing emissions; we’re also driving innovation, creating jobs, and building a sustainable future.
Looking Ahead to the Future
As we move towards 2030, there’s a lot to be excited about. The electric vehicle market is booming, and with government support, we’re confident that the UK can achieve its Net Zero goals. At The Electric Car Scheme, we’re here to help businesses navigate this transition, offering solutions that make going electric easier than ever.
If you want to learn more about The Electric Car Scheme and how it could work for your company, visit our website or book a call!
Last updated: 04/09/2024
