Vauxhall Plant Closure Shows Policies Directly Undermining Their Own Intentions

Commenting on the recent decision of Vauxhall to close their Luton van production plant with the loss of 1,100 jobs, Energy Analyst Andy Mayer at the free market Institute of Economic Affairs said:

“Policies need to change. The UK’s unrealistic desire to ban all sales of new petrol and diesel vehicles by 2030, and the linked zero emissions vehicle (ZEV) mandate, is causing real damage to UK investment and industry.

"This plant was due to expand to produce electric vans. It’s now closing, directly undermining the intentions of the policies in question.

"The ZEV forces manufacturers to hit rising quotas for EV sales, from 22% this year to 80% in 2030, with the threat of heavy fines if they miss. This is supposed to encourage EV discounting, and it does, but not enough to sufficiently drive up demand, given a price premium over conventional vehicles of 40-50%. This leaves manufacturers with the difficult decision to curtail conventional sales or exit the market. Vauxhall have evidently decided on the latter, at least for part of their UK output.

"A wiser path would involve scrapping the mandate and targets, and letting the EV market evolve in response to demand, nudged only by incentives that are already there in high rates of tax on fuel and polluting vehicles.”