Guy Bird
After 18 months of the ZEV Mandate, some progress has been made on electric car sales, but van targets seem miles from market reality. Motor Trader spoke to industry experts about the problems and possible solutions
Despite tweaks to the small print of the Zero Emission Mandate by the new Labour Government – after an industry consultation earlier this year – including “flexibilities” in its interpretation to allow vehicle makers to avoid paying hefty fines for not hitting 2024 targets, things are looking less upbeat for 2025, especially in relation to vans.
The stats, so far, are stark. “The zero emissions target for the van market this year is 16% but even the best sales month we have seen so far has not exceeded 10%,” points out Peter Golding, MD at fleet software specialist FleetCheck.
“There would have to be a decisive shift through Q2 to Q4 to hit the Government’s target and there is no sign such a change is coming.
For 2026, the target increases to 24% and again, it’s almost impossible to conceive that the market is going to gain the necessary momentum to get anywhere near that figure.
The potential shortfall fines to manufacturers are now £15,000 per unit but the Government insists that these will not need to be paid because of inbuilt flexibilities, including recent changes to allow trading off car versus van sales, but that’s just storing up further pressures for the future. It’s an exercise in can kicking, not a solution.”
The basic difference between the car and van market is of course that the van customers aren’t swayed by emotional buying habits or enjoy favourable company car benefit-in-kind tax breaks for “going green”.
Vans need to be business tools first and current electric van choices have functional downsides compared to internal combustion-engined (ICE) equivalents, as Andy Picton, specialist residual value analyst and team Leader at Glass’s points out.
“At the moment, with electric vans there are always compromises,” he says. “Take pick-ups, the main criteria is a one-tonne payload, to be able to tow 3.5 tonnes and have a decent range. With electric versions – normally – you only get one of the three. You can’t do all three at the same time.”
Steve Bridge, md of Mercedes dealer eStar Truck and Van provides a fascinating – and candid – view of the pros and cons of electric vans, which he says are currently about 10% of his total sales mix.
“Of course we need to get to 16% [in 2025] and then subsequently much higher figures as we head towards 2030, which to put it into perspective is as far away as when Boris Johnson sat on the telly and told us all to stay at home,” he explains.
“2030 seems a long way away, but it isn’t. To persuade, demonstrate and encourage customers to move into this product is our job. However, and this is a controversial thing to say,
“I also have an obligation not to mis-sell. I won’t put somebody into a product not suitable for them just because one part of the Government is encouraging us to achieve a target. I can foresee in five, ten or 20-years’ time there being a huge investigation about mis-selling this product just to achieve a target and not pay a fine.”
And Bridge goes on: “Morally we have to look at a client’s demands and needs just like we do in the finance world. If the client is not doing a great deal of mileage during the day and can go home at night, charge the vehicle or use public infrastructure and the business case is suitable and compelling, why would you not consider an electric vehicle? Because they are pretty good and when it comes to longevity, there aren’t as many things to go wrong.”
The higher prices of new electric vans compared to ICE versions is also a sticking point, requiring a different selling approach but also offering a new customer relationship opportunity reckons Bridge:
“The lifecycle of these vehicles needs to extend. Everybody is used to changing their vehicle often, be it annually or every three years when the warranty runs out. But that calculation doesn’t work on electric vehicles because the cost of production is higher, the lifecycle of these vehicles is longer.
Really what should be happening is encouraging people to take these vehicles for a longer time. But what then happens is that the volumes of vehicles we are encouraged to sell from a market share race [perspective] becomes an issue. If you don’t change the client’s vehicle twice in six years, only once, then you’re selling half the amount of vehicles over that period of time.
“But if you put someone into a vehicle for five, six, or seven years, what would be the harm in signing them up to a service contract over that period so that at least you see that client for 60 months or six times, rather than three times if they take a diesel van. It’s a different method of approach.”
Short-term, neither Glass’s Picton nor eStar’s Bridge is sure the Mandate’s 16% electric van sales quota can be met in 2025, but they do have optimism for the medium and longer term.
“We might make 10-12% this year, but manufacturers are reducing diesel offerings too [which would then affect the percentage split], basically trying to get people into EVs,”
Picton reasons. “As we get to the next generation of EV technology, which will start to appear from 2026 onwards, people will move to it. Look at the ‘disruptors’. Kia is starting from scratch but look at what they’ve done with cars.
Ford Transit Centre, Abingdon.
Photo: James Lipman // jameslipman.com
“I’ve been fortunate enough to drive the new Kia electric van and I think if anyone can do it, Kia can. We’ve got BYD mostly coming in with electric vans as well. The next generation of battery electric technology is not necessarily about bigger batteries, but solid-state technology where the battery is smaller but denser and can carry a bigger charge. And charging times will come down, so you’ll be able to get a full charge in 15-20 minutes instead of an hour. I also think other technologies like hydrogen on bigger vans and into trucks will do well long-term.”
“It’s a complex subject,” Bridge concludes, “but to sum up. I don’t think it’ll play out by 2030 [i.e. Mandate targets met]. I think there needs to be a step from emissions to low emissions to subsequently no emissions. And I think people should have a choice: If they want electric, they can have electric, or diesel or hybrid.”
Meanwhile, with the UK Government making zero noises about dropping or stalling the ZEV Mandate, it seems its only option is to look into more of those “flexibilities” along the way.
Guy Bird is a long time contributor to Motor Trader