Historic luxury car marques are finding this to their cost as they delay overly ambitious electric vehicle (EV) plans, including Volvo last September and Jaguar Land Rover (JLR) this week, coinciding with layoffs of 500 staff, or 1.5 percent of their British workforce. [emphasis, links added]
Land Rover customers are not placing sufficient orders to justify rapid expansion, and for JLR, a relative laggard in EV development, this is a second delay.
And it’s combined with generally bad market conditions: the UK’s expensive energy, tax rises, expected rises in the cost of labour from employment legislation, it still being difficult to build or expand anything anywhere, restrictions on skilled worker visas, and in export markets, Trump tariffs and their ripples across global supply chains.
The JLR move also follows the relaxation of the UK zero-emission vehicle (ZEV) targets in April.
The scheme compels manufacturers to sell a rising ratio of their output as EVs or be heavily fined, a daft idea akin to taxing typewriter makers for not selling enough word processors.
The changes allow suppliers to delay compliance until nearer 2030, when it is assumed demand will be higher; and it will likely be delayed again if it isn’t. No government likes presiding over plant closures, even less so when their policies are to blame.
Which is the underlying issue.
After the Thatcher revolution, industrial policy was largely dead in Britain. We said goodbye to British Leyland and the militant union culture that accompanied decades of politicians “picking losers” as national champions and repetitive bailouts, including eventually of UK plc by the IMF.
However, it was put on life support by climate policies during the Blair/Brown years, creating low carbon markets that could only exist by extracting rent from the tax or bill payer in a hierarchy of plans, targets, and controls.
Then restored more widely in the 2010s by the Coalition Government, launching sector plans for strategic industries, including automotive.
The Government will continue to produce EV targets and mandates, demand industry to dance to that tune, then change the record.
State ownership might have been largely out, but state direction was back, and the cozy low-carbon industrial complex emerged as an unhealthy expression of too close a relationship between business leaders and government.
A template applied to the UK’s pandemic response, yielding a host of procurement scandals, a useless app, and what essentially amounted to a ban on driving to most places, except perhaps Barnard Castle.
Under Labour, the sectors are now missions, and automotive sits within advanced manufacturing, with a nod towards low carbon (batteries), and artificial intelligence (self-driving). …
So the Government will continue to produce EV targets and mandates, demand industry to dance to that tune, then change the record.
The confusion will continue, and the costs of that certain uncertainty will be reflected in higher prices, lower demand, and a slower transition to newer vehicles, whether EVs or anything else. Car manufacturers may well be in the headlines again soon.
Read full post at The Telegraph
Great Job Andy Mayer & the Team @ Climate Change Dispatch Source link for sharing this story.
