MG doesn't expect major changes to be made to the zero-emission vehicle (ZEV) mandate, because this could increase pressure on the UK government to reverse other financial policies, such as farmers’ inheritance tax.
Commercial director Guy Pigounakis said the ZEV mandate, a fast-track review of which was confirmed Tuesday by the government, had fundamentally “changed the way cars are designed, engineered, priced and distributed” and “will continue to do so in its current guise”.
However, he believes the scope of the review will ultimately be limited, due to the can of worms it could open for the government.
He said it's likely to extend only to a “recalibrating” of the individual targets each year by lowering the thresholds while also reducing the fines for non-compliance, which currently stand at £15,000 per car.
Even if they appear small, he said, these changes will still make a “huge difference” to some car makers, some of which “are planning to sell less cars next year”.
“When have you ever heard that before?” said Pigounakis, explaining that selling fewer of the right type of cars would be more profitable for makers.
Rather than a result of pressure from car makers, Pigounakis believes the review is related more to UK job losses and factory closures, as is happening at Ford and Stellantis.
“The last thing you want to do is start losing two or three or four massive manufacturing plants in the UK,” said Pigounakis, particularly when “the government's whole economic policy is based on reindustrialisation”.
MG is over-performing against its current target of 22% of sales of electric cars. As such, it stands to benefit from the wider ZEV mandate scheme by selling credits to other car makers to help them become compliant.
Pigounakis said it would be “easy business” and that the going rate would “be a fraction” of the £15,000 fine that a car maker would pay per car without a credit - but “I think it is wrong, actually”.
He said: “If you look at some manufacturers, especially ones that only build electric cars, they make a huge amount of money from selling tax credits, because every car they sell generates a saleable tax credit. People like Tesla, for instance. If you look at their accounts, they make almost [as] much money selling tax credits [as selling cars].”
Pigounakis said there's an inherent unfairness in the ZEV mandate scheme in that it doesn't recognise and reward car makers for lowering fleet CO2 emissions, instead only mandating the sale of a set proportion of EVs.
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