Labour makes huge U-turn on EV rules with warning UK car industry is 'hurting'

Electric car ZEV mandate rules could be updated (Image: Getty)

Labour will change controversial electric car legislation with small updates to ZEV mandate rules after concerns from industry leaders. 

Although Labour’s 2030 pledge to ban the sale of new petrol and diesel cars will remain, how firms get there could change. 

Business secretary Jonathan Reynolds admitted he was "profoundly concerned" about the ZEV mandate rules which dictate production levels. 

The rule means firms must ensure that 22% of their stock is zero-emission despite demand being nowhere near supply. 

It has forced some firms to sell EVs at heavily discounted rates to meet targets which undermines possible revenues and profits.

Jonathan Reynolds has admitted more 'support' is needed (Image: Getty)

Mr Reynolds confirmed a "fast-track" consultation will be established with updates to the system likely.

Speaking at the Society of Motor Manufacturers and Traders (SMMT) annual dinner, Mr Reynolds accepted that officials had heard "loud and clear on the need for support to make this transition a success".

He added: "I'm going to be frank with you - I don't believe the policies that we have inherited, and I mean specifically in relation to zero-emission vehicles, are operating today in a way anyone intended them to."

Brands are slapped with hefty £15,000 fines for every vehicle over the production limit unless they buy credits from other firms under the target. 

It is understood that updates will not water down annual percentages but could make amendments to the possible fines issued to firms.

The news comes as Vauxhall owner Stellantis announced plans to close their Luton factory with around 1,1000 workers at risk of losing their jobs.

Earlier this year, Stellantis warned it might stop production if the Governemnt didn't come in to help around ZEV mandate fears and its impact on profit targets

SMMT Chief Executive Mike Hawes welcomed an "urgent review’ as he warned the car industry was "hurting" under the current plans.

Mike explained: "We need an urgent review of the automotive market and the regulation intended to drive it. Not because we want to water down any commitments, but because delivery matters more than notional targets. 

"The industry is hurting; profitability and viability are in jeopardy and jobs are on the line. When the world changes, so must we. Workable regulation – backed with incentives – will set us up for success and green growth over the next decade."

Last week, transport secretary Louise Haigh accepted there would be some "flexibilities" around the ZEV mandate but policies would "not be weakened". 

However, officials softened their approach after a two-hour meeting with car bosses last week where business leaders outlined their concerns.