If motorists cannot buy the cars they want, the benefit to them seems . . . limited.
Some predictions are not hard to make. In May, I wrote this:
A key part of the U.K.’s green “transition” (an orderly word for a chaotic process) has been the planned prohibition of the sale of new internal-combustion-engine cars (including, insanely, hybrids) from 2035. The preamble to this ban is a somewhat Soviet-style quota system, which has parallels in the EU, California, New York, and elsewhere (including the U.S. as a whole if the EPA’s new rules survive). Starting from 2024, EVs must account for an increasing percentage of automakers’ new car sales in the U.K., whether or not there is real demand for them.
Well, it wasn’t much of a prediction really. The day before, Ford had warned that it would be prepared to ration the sales of traditional cars to avoid paying the steep fine imposed on every sale of a traditional car if sales of such cars exceeded the quota allowed in the U.K. that year.
Ford’s U.K. boss warned that this would be likely to mean that the price of conventional cars would increase.
I added this:
[H]igher prices in the market for new traditional cars will spill over into the used-car market…
As a gesture of contempt for free markets and consumer choice, these quotas are…up there. The U.K. quota for an automaker’s new EV sales in 2024 is 22 percent. Currently sales are running at a rate of 17 percent. For every conventional new car a manufacturer sells in a year in which it fails to meet its EV quota, it will pay a fine of £15,000.
Colin Walker, the Head of Transport at the Energy and Climate Intelligence Unit, “a non-profit initiative that supports informed debate on energy and climate issues,” tweeted yesterday that EVs’ “market share in August reached 22.6%, the highest for a month since December 2022.”
The number he quoted was for registrations, not sales (the difference is explained here). Nevertheless the latter should follow the former sooner or later. If this trend continues could the 22 percent threshold for 2024 as a whole be reached? I doubt it. EVs only account for 17.2 percent of U.K. registrations for the year as a whole.
Digging into the numbers produced some other nuggets. EVs saw a 10.8 percent increase in registrations, but hybrids were up 36.1 percent. Plug-ins were down in August, but for the year-to-date, registrations of plug-ins were up 24.9 percent, versus 10.5 percent for EVs. Oh. Other hybrids increased by 17.9 percent. The market share of hybrids and plug-ins also grew faster than that of EVs.
Under U.K. rules, sales of new hybrids or plug-ins, cars that people actually want, will be banned from 2035. Britain’s Labour government, run by climate fundamentalists even more fanatical than the wretched Tories, wants to return the ban on combustion engines to 2030, the date to which it had earlier been advanced by a showboating Boris Johnson (is there any other kind?) before Rishi Sunak moved it back to 2035. No word yet on whether any new 2030 deadline will include hybrids and plug-ins.
Walker looks at the August data and concludes that the quota regime “is generating competition between manufacturers. We’re seeing them cutting prices to attract customers so they can hit their targets. The beneficiaries of this ‘war on motorists’ are the UK’s drivers.”
Not really. If motorists cannot buy the cars they want, the benefit to them seems . . . limited. And competition between manufacturers is only half the picture. If this was a truly free market, there would be competition between technologies too, but that sort of competition is being squeezed out by governments seemingly afraid of allowing EVs and traditional cars to compete against each other for too long. Weird, EVs being such a massive improvement and all that.
Looking at the August numbers, we can see that registrations of traditional cars are down 10.8 percent, despite being slightly up for the year.
Could this be the reason?
Car makers are rationing sales of petrol and hybrid vehicles in Britain to avoid hefty net zero fines, according to one of the country’s biggest dealership chains.
Robert Forrester, chief executive of Vertu Motors [a large UK car retailer], said manufacturers were delaying deliveries of cars until next year amid fears they will otherwise breach quotas set for them by the Government.
This means someone ordering a car today at some dealerships will not receive it until February, he said.
That reminds me of the old Reagan joke about a Soviet citizen being told he can have a new car. Pay for it now, and he can collect it in ten years from today. He asks: “Morning or afternoon.” “Why would that matter?” “The plumber is coming in the morning.” (Original here.)
Back to the Daily Telegraph and Vertu’s Mr. Forrester:
He said: “In some franchises there’s a restriction on supply of petrol cars and hybrid cars, which is actually where the demand is.
“It’s almost as if we can’t supply the cars that people want, but we’ve got plenty of the cars that maybe they don’t want. . . .
Mr Forrester added that although some people might cheer falling electric car prices, supporters of the ZEV mandate in its current form were “economic buffoons, because car manufacturers are being forced to discount EVs to such an extent that they’re making losses . . . and that is not a good thing for business”.
Forrester warns that the government is constraining the new car market and, quite possibly, is creating “a business environment in the UK where manufacturers may question whether they want to make cars here.”
The green-jobs miracle may be in for another road bump.
The EV sales quota is set to increase each year, tightening the squeeze on auto manufacturers, the same manufacturers who will be expected to subsidize their investment in EV production (for now) with the profits they make from selling conventional cars so long as they don’t sell too many of them, that is.
Interestingly, Vertu is saying that there is strong demand for used cars. Could those used cars be conventional cars, I wonder?
The Daily Telegraph:
Mr Forrester’s warning comes after the Society for Motor Manufacturers and Traders (SMMT), which represents car makers, slashed its forecast for electric car sales this year amid the ongoing slowdown in demand.
The group now predicts electric vehicles (EVs) will account for 18.5pc of the new car market in 2024, down from an earlier prediction of 19.8pc.
The demand for EVs is coming from fleet buyers; individual car buyers, not so much.
Forrester argues that the “new car market is no longer a market, unfortunately. It’s a state-imposed supply chain.”
What could go wrong?