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This week’s announcement of plans to close a Vauxhall van factory in Luton underlines the UK’s ongoing struggle with the transition to electric vehicles (EVs).

Experts say that EV uptake isn’t keeping up with the government’s plan for UK manufacturers to sell only zero-emission vehicles by 2030. Stellantis, which owns Vauxhall and several other car brands, blamed its decision to close the Luton factory “on the UK’s ‘stringent’ zero-emission vehicle mandate, sparking a row over the viability of Labour targets”, said Yahoo News UK.

Car manufacturers face fines if they don’t comply with yearly EV sales targets, so they often offer discounts or promotions, but plateauing demand for EV vehicles has put even the most established car companies under stress.

Private motorists “are refusing to play ball with the government’s targets”, said The Spectator, which means “some very large fines are looming”.

What are the zero-emission targets?

In January, a government-backed pledge to switch entirely to electric vehicles by 2035 – the Zero Emission Vehicle (ZEV) mandate – was signed into law.

The mandate set incremental benchmarks, requiring car manufacturers to sell set percentages of EVs in each year leading up to the total ban.

This year, Labour leaders said it would reinstate the ZEV mandate’s original goal: 100% zero-emission vehicles by 2030. “This is five years earlier than the original mandate target set by Rishi Sunak’s government – and a demand car makers say they can’t meet,” said the Daily Mail.

To meet the current goal, 28% of new cars and 16% of new vans sold in 2025 must be zero-emission. And if makers can’t meet the benchmark, they must pay a fine: £15,000 for each non-compliant car and £18,000 for each non-compliant van.

Why are car makers ‘hitting the panic button’?

This year, poor demand for EVs means manufacturers have struggled to meet the government’s targets. And many are now left with a difficult choice.

“To avoid fines, they say they are having to discount new vehicles heavily,” said BBC News. Or they are “subsidising” rival companies which only build electric cars, and “none of which have a manufacturing base in the UK”.

Stellantis and other car makers have “hit the panic button”, said the Daily Mail, and “slashed the costs of some of their EVs by as much as 35%”. Car firms are taking an estimated £4bn hit to make discounts, the Society of Motor Manufacturers and Traders (SMMT) told the paper, and “has warned that the mandate will have ‘devastating impacts'” on businesses and jobs.

Ford has already announced it will cut 4,000 jobs across Europe, and Volkswagen is set to shut three of its factories in Germany “for the first time in the history of the company”, said The New York Times. Jaguar, too, is undergoing a complete rebrand while it switches to 100% EV production.

“We need government-backed incentives to urgently boost the uptake of electric vehicles,” Ford UK’s managing director Lisa Brankin told the BBC. The company has put hundreds of millions into bolstering its electric fleet but it isn’t seeing results. Without demand, Brankin said, the EV mandate “just won’t work”.

What’s the government response?

After Vauxhall’s announcement, the government seems to be paying closer attention to manufacturers’ demands.

Business Secretary Jonathan Reynolds told car manufacturers he is ”profoundly concerned” about how the targets are panning out. “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,” he said, according to Yahoo News UK.

However, it seems clear that the government wants “to stick to a deadline of 2030 for phasing out the sale of new petrol and diesel-powered cars”, said the news site.

Quentin Wilson, journalist and former “Top Gear” star, told the Daily Mail that the government needs to spend more on customer incentive, such as electric chargers and free parking for EVs, if it continues to impose fines on manufacturers.

“What the government must do is to make it easier for consumers to buy these cars, and that means offering incentives, like, you know free parking in some towns and cities,” he said.