Yahoo Finance Electric car ambitions will be stifled by fines for missing targets, Jaguar warns
Jaguar Land Rover has warned that its electric vehicle (EV) push could be under threat if it is slapped with fines for failing to meet tough new government targets.
The Government has proposed a new zero emission vehicle mandate that would force manufacturers to sell a certain proportion of electric cars by the end of the decade.
The plans, due to come into effect next year, could punish car makers that do not meet the quotas with fines or force them to buy so-called carbon credits from other EV manufacturers.
But a source close to JLR told the Sunday Times: “If we have to suddenly pay fines… there would be a significant financial impact to us, which would damage the plans that we have in place.”
The company, which is owned by Indian car giant Tata Motors, is understood to have warned ministers that the new rules could hamper its electrification strategy.
Under the strategy, dubbed ‘Reimagine’, JLR plans to become an electric-only brand by 2025 by relaunching all Jaguar and Land Rover models as electric vehicles.
However, the company has warned it may have to scale back plans for new jobs or water down the number of new models it launches as a result of potential fines.
Ministers have also been warned that Tesla, the electric car group led by Elon Musk, could stand to make huge profits from selling carbon credits.
Carbon credits, which are given to car manufacturers that produce low-emission vehicles, have become a lucrative source of income for Tesla, which sells excess credits to struggling rivals.
Industry sources are said to have warned that the US company would cash in on the electric vehicle mandate at the expense of the UK’s nascent EV industry.
Under the plans, car makers would have to ensure that 22pc of their car sales are electric in 2024, rising steadily to the end of the decade, when the sale of new petrol and diesel vehicles will be banned.
However, the Government is yet to confirm the scale of the fines and a decision is overdue.
Mike Hawes, chief executive of industry body SMMT, complained that the lack of certainty over the new measures was holding back the shift to EVs, adding that ministers needed to consider other factors such as the cost of the new cars and availability of charging points.
He said: “If this regulation is to deliver the market transition Government wants, industry needs that detail for product planning, and consumers need the confidence to switch.”
The Department for Transport said a final consultation and cost-benefit analysis will be published in due course.
A spokesman added: “We will end the sale of new petrol and diesel cars and vans by 2030, and all new cars and vans will be fully zero emission by 2035. That is why we are working to introduce a Zero Emissions Vehicle mandate to be implemented in 2024.
“Vehicle manufacturers and supply chains play a vital role in the transition to cleaner vehicles, and we continue to work closely with the industry to help shape future regulations.”
