Government rule change could make electric cars 20% cheaper | Industry - Car News Oct 2021

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16:03 Friday 29 Oct 2021

Electric car prices are predicted to fall by as much as 20%, following important new industry rule changes by the Government.

The new rules are part of the Government’s Zero Emission Vehicle (ZEV) mandate, which will be introduced in 2024 and require car manufacturers to sell a set proportion of zero-emission vehicles in the UK.

The exact ZEV targets that carmakers will need to meet each year from 2024 are still to be determined, but it's already clear that any manufacturers who fail to meet them will face hefty fines. 

The ZEV mandate was announced earlier this week as part of the Government’s Net Zero Strategy, which sets out the policies and proposals to decarbonise all sectors of the economy, including transport, to meet the Government’s legal requirement of net zero carbon emission by 2050. 

The knock-on effect of the ZEV could force carmakers to slash EV prices to make them more affordable for new car buyers and ensure the Government targets are met. 

"The price of EVs will drop by 10% to 20% - as a minimum,” says motoring consultant Martin Ward, who has worked in the industry for the past 50 years, mainly at car pricing business CAP (now CAP HPI).

However, while price cuts could be on the way, Ward has warned that car buyers could get less choice as manufacturers could decide there are “better” markets elsewhere to sell to, with fewer restrictions.

Ward said: “You’ve got to ask yourself if you were a manufacturer would you bother with the UK and the hassle of making right-hand drive cars, which cost more money if you’re then going to face penalties?

“So I think there’s a risk the UK could become the poor relation.”

The CAZ rules are designed to reduce the UK's greenhouse gas emissions. Transport is one of the worst polluters of any sector across the economy at 23% in 2019, according to the latest Gov figures, with the majority (55%) coming from passenger cars. 

Alongside the ZEV mandate, the Government announced an additional £620 million to support the roll-out of electric vehicle charging infrastructure, with a "particular focus" on local on-street residential charging and targeted plug-in vehicle grants. However, what proportion of the £620m each aspect will get is still to be determined by the Government.

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