Nissan wants 'urgent' action on ZEV mandate after government talks

Japanese firm warns fines risk future investment, while ministers insists phase-out date for ICEs remains

Nissan has called for the UK government to make urgent changes to the Zero Emission Vehicle (ZEV) mandate, warning that failing to do so risks "undermining the business case" for future investment.

Representatives from the Japanese firm were among a number of manufacturers who met with transport secretary Louise Haigh and business secretary Jonathan Reynolds today (Wednesday 20 November) to discuss the electric vehicle transition, including the ZEV mandate. Officials from BMW, Ford, Stellantis, Tesla, Toyota and Volkswagen also took part in the talks, along with representatives from the Society of Motor Manufacturers and Traders (SMMT), charging industry body ChargeUK and the British Vehicle Leasing and Rental Association (BVRLA).

In a statement after the meeting the government confirmed that it would retain the planned 2030 date for the phase-out of pure combustion-engined vehicles – although certain hybrids will be allowed until 2035 – but did not address manufacturers’ concerns about the ZEV mandate, leaving open the possibility for future amendments.

The ZEV mandate requires manufacturers to sell an increasing percentage of zero-emission cars each year, with stiff penalties for those who fail to achieve their targets. While there are a number of exemptions and the ability to pool or trade credits, in its simplest form firms this year must ensure that 22 per cent of their new car sales are zero-emission. That rises to 26 per cent next year, and ramps up further to 80 per cent by 2030.

In a statement, Nissan cited SMMT data suggesting EV sales will only reach 18.5 per cent of the total market this year due to the slowdown in consumer demand for EVs, potentially leaving manufacturers in line for stiff penalties. 

Calling the targets “outdated” Nissan said that the ZEV mandate could result in car firms being fined because of slowing consumer demand. One option for firms would be to purchase credits from EV-only brands, but Nissan – which has a major plant in Sunderland – noted that none of those brands currently manufacture in the UK, “meaning the UK automotive industry will effectively be subsidising EV sectors in other countries, at the expense of investment in Britain.”

Nissan said it remains committed to a fully electric future, and is currently gearing up to build three EVs in Sunderland. But it wants the government to address the ZEV mandate by increasing the flexibility to ‘borrow’ credits from future years, and a two-year monitoring period for 2024 and 2025 in which no fines are levied.

“Nissan has consistently supported the aims of the UK’s ZEV Mandate and have been working with Governments and partners towards a fully electric future since the first Nissan Leaf arrived in 2010,” said Nissan’s European chief Guillaume Cartier.

“The Mandate risks undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment. We now need to see urgent action from the Government by the end of the year to avoid a potentially irreversible impact on the UK automotive sector.”

Noting that Nissan employs 7000 people in the UK across its facilities and that it contributes more than £2bn to the UK economy, Cartier added that the firm was committed to working the government on a long-term solution, but said “action is needed urgently to ensure we protect UK car manufacturing and ensure we can all realise and support the transition to zero emissions and carbon neutrality.”

But in a statement after the meeting the Department for Transport said: “Recognising the global challenges the industry has been facing, ministers underlined the Government’s commitment to working constructively and in close partnership with the sector as we support the transition to electric vehicles by 2030.”

The government has always said that the sale of certain hybrid vehicles, likely with significant zero-emission capability, can be sold between 2030 and 2035, although it has only said that specifics will be given “in due course”. The statement didn't specifically address the ZEV mandate, so it is possible that some changes could be made to it in response to industry concerns.

The government added that the UK has the fastest growth of zero-emission vehicle sales of any major European market, adding: “We’re providing more than £2.3 billion to support industry and consumers in making the switch, with 57 new public electric vehicle chargers added on average each day.”

SMMT chief Mike Hawes said the meeting "was an important opportunity to restate the UK automotive industry’s commitment to both economic growth and Net Zero. However, the industry also made clear its concerns about the pace of the EV transition and the negative effect this is having on the health of the overall market and the attractiveness of the UK as a manufacturing location.

"A strong market and manufacturing base that sustains jobs and drives growth requires workable regulation backed by support for consumers – fiscal incentives and confidence that the charging network will be there when it is needed. We will now work urgently with government to identify any adjustments necessary to help the industry and government meet their targets, instilling confidence in the consumer and other stakeholders, all of whom are part of this transition."

Vicky Read, the head of ChargeUK, called the charging industry “a UK growth story”, adding that the progress made in the past 10 years “was acknowledged by the government” in the meeting. 

Reed added: “Everyone is agreed that uncertainty is the enemy of the EV transition and threatens investment on all sides. We will study the forthcoming consultation closely and continue to make the case to retain what we already have – a strong ZEV mandate that works.”

More reaction to follow.