The abrupt resignation of Carlos Tavares, CEO of Stellantis, has highlighted the mounting challenges some of the world’s renowned car manufacturers face as they navigate the shift to electric vehicles. Just last month, Stellantis, which produces brands like Fiat, Vauxhall, Jeep, and Peugeot, announced it would close its Vauxhall van plant in Luton. They partly attributed this move to pressure from electric vehicle (EV) sales targets set by the UK government. Meanwhile, Ford has revealed plans to lay off 4,000 employees across Europe, including 800 in the UK, citing slow growth in EV sales as a significant factor.
This situation presents a critical juncture for the Labour party and a sector vital to the green transition. The government reinstated the 2030 deadline—initially postponed to 2035 under Rishi Sunak’s leadership—after which the sale of vehicles powered solely by internal combustion engines will cease. However, car manufacturers are urging a softening of the zero-emissions vehicles (ZEV) mandate, which requires an incremental increase in EV sales. On the political right, figures like Kemi Badenoch and Nigel Farage attempt to portray the country’s net-zero responsibilities as a threat to economic prosperity and growth.
In this context, Labour must demonstrate decisiveness and vision, backed by resources that can transform market demand and elevate the national conversation about the green transition. Jonathan Reynolds, the business and trade secretary, recently stated, “When this government says that decarbonisation must not mean deindustrialisation, we mean it.” But it’s crucial for the government to support car manufacturers not by easing efforts but by enacting transformative market measures that amplify demand.
The strategies needed to make a significant impact are no secret. The House of Lords environment and climate change committee has recommended “targeted grants” to make EVs more financially accessible until they reach price parity with traditional petrol and diesel vehicles. Crucially, financial incentives should also aim at private consumers, not just corporate fleets.
Additionally, there’s an urgent need to rapidly expand charging infrastructure, especially outside London and the South East and at motorway service stations. The 20% VAT on public charge points, which disproportionately affects drivers without off-street parking, should be reduced to align more closely with the 5% charged on household electricity. As noted by MPs on the environment and climate change committee, these actions should be part of a communications strategy that counters the anti-green narratives prevalent in much of the media and on the political right.
A proactive approach from the government, committed to its plan, benefits both automakers and consumers. Delaying progress is not a valid strategy, as China’s growing dominance in the EV market underscores the need for British companies to secure their stake in the future, even if short-term financial sacrifices are required. Ultimately, supporting British automakers is about ensuring the nation can compete in the electric car industry.
Labour’s role, as a proponent of the UK’s green commitments, is to establish financial policies that genuinely motivate private buyers and to develop state-of-the-art infrastructure that boosts consumer confidence. With effective leadership, Britain’s transition to a greener economy can also lay the foundation for a robust industrial future.
