‘Delusional’ electric car targets are damaging the economy, warns retailer

The chief executive of one of Britain’s biggest car dealerships has said “delusional” electric vehicle (EV) targets are damaging the economy.

Robert Forrester, boss of Vertu Motors, said a desperate scramble to hit the targets was diverting money from investment and jobs towards discounts meant to entice drivers to buy EVs.

“You get into a nasty vicious circle of discounting, then discounting, then discounting, to try and keep pace with a target that has no relation in free market capitalism,” he said.

The policy risked damage not only to the car industry but also to the wider economy, Mr Forrester added.

“Youngsters don’t get apprenticeships, people don’t get jobs and people don’t get new cars in the numbers they probably would normally, which actually is a negative environmental benefit.”

Mr Forrester has previously warned that car companies are rationing the supply of petrol sales and hybrid vehicles in order to hit the EV sales targets and avoid fines.

Known as the zero emission vehicle (ZEV) mandate, the Government has set a target for all new cars sold in the UK to be fully electric from 2035.

To reach that goal, manufacturers must ensure a gradually increasing proportion of their sales is EVs each year.

The target last year was for 28pc of new cars sold to be fully electric, but it will increase to 80pc by 2030 and 100pc five years later. Companies that fail to hit the targets face fines.

Manufacturers have said the targets are too aggressive and do not match the scale of demand among drivers. As a result, they have had to buy credits or subsidise prices to artificially boost sales.

“It’s fair to say the industry is not meeting the targets, which are broadly delusional, and are never going to meet the targets,” Mr Forrester said.

“I think we are at the crunch point where the whole industry is screaming at the Government to say, can we just have a bit of reality that your policy isn’t working? It’s reducing economic activity, it’s reducing jobs.”

Stellantis, the owner of Vauxhall, said in March that it might shrink its sales operations in the UK because of the ZEV mandate.

“From a sales perspective, the regulation is forcing car makers to lose money,” Emanuele Cappellano, the head of Stellantis in Europe, told Autocar. “The only ones who benefit are Chinese importers.”

Chinese manufacturers can produce EVs more cheaply than European competitors thanks to generous subsidies from Beijing for developing the technology. As a result, they can entice motorists more easily with lower prices.

Chinese car companies also benefit from the scheme as they are able to sell credits to other manufacturers.

Mr Forrester was speaking to mark the publication of Vertu’s full-year results. The UK car dealership, which has 191 locations, saw revenues rise by 1.5pc to £4.83bn last year. Mr Forrester said Vertu saw an increase in tyre sales as the pothole crisis led to more blowouts.

However, pre-tax profit fell to £20.3m from £24.8m amid pressure on the new car market.

Mr Forrester said Vertu Motors had also started building a stockpile of motor oil amid the war in Iran. The conflict has disrupted the supply of the lubricant, which is essential for servicing cars.

“We never had to have [a stockpile] before,” Mr Forrester said. “It means that if we’re going to run out of oil, it will be much after everybody else … but it shows you there is definitely pressure in terms of oil supplies into the UK. There is no doubt at all that there is a problem coming.”

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