CEO Update

Remove the remaining roadblocks and automotive will thrive

15 December 2023 #CEO Update

As the season’s festivities get underway, some outstanding issues remain before the automotive industry can call time on 2023. Last week we took a collective breath as the European Commission proposed to extend the current EU-UK trade rules governing EVs and batteries to 2027. We must hold that breath just a while longer as the proposal goes through its journey to approval and, hopefully, ratification. While we remain confident that governments will back the extension – after all, avoiding tariffs is in everyone’s interests – it is not yet a done deal and, with just two weeks to go, there is scant time to deal with any roadblocks.

In the UK, the Zero Emission Vehicle Mandate – or rather the Vehicle Emissions Trading Scheme Order as it is now called in regulation – passed seamlessly into law after a House of Commons vote last week. While no one expected it to fail, there are no certainties in politics (as we saw on other matters this week). However, the industry now has that regulatory certainty, so our focus is on delivery, which is perhaps more easily said than done. We have the products – as evidenced by the billions of pounds of recent investment. Now we need the customers. The industry can help drive interest with exciting new products but it cannot necessarily drive demand on its own, as there are far too many external economic and social variables.

We know drivers are interested in switching from ICE to EV, but they are also hesitant; anxious about how their day-to-day lives will change, uncertain about how and where to charge and the associated costs, and concerned about affordability during tough economic times. That’s understandable – for most people, this is new technology which requires a leap of faith. We need to help them take that leap, encouraging them to make the switch. Purchase incentives coupled with reduced tax on public charging and binding targets on infrastructure rollout would send the right message, bringing the UK in line with other major markets whose own transitions are accelerating at pace.

Getting the right infrastructure in the right places is equally important for Britain’s working vehicles, and this week SMMT fed into government’s call for evidence as it develops its zero emission HGV and coach infrastructure strategy for publication in 2024. With zero emission models accounting for just one in 600 trucks on the roads and an initial end of sale date of 2035, the need for such a strategy is paramount – as we set out in our HCV infrastructure position paper earlier this year.

Lastly, I leave you with the exciting news that the SMMT-Ben Drive to Thrive apprentice pilot scheme, shared with you just two weeks ago, is now almost fully booked for 2024. The overwhelming number of applications received is testament to the crucial need for such support in attracting talented individuals from diverse backgrounds to the sector. These are essential initiatives which we hope will make a significant impact in providing more opportunities to forge a career in this exciting industry.

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