Our February webinar which took place on Tuesday 9th February 2021, provides an overview and update on the UK car and LCV markets.
Q&A from the webinar with Anthony Machin
What prospect for ‘efuel’ vehicles as an alternative to electric particularly for LCV?
As an industry, we must reduce emissions. To do this we must investigate all possible alternatives. In the UK we already know what the deadlines are. The UK Government already has an ambitious plan to stop the sale of new cars and Light Commercial Vehicles (LCV) with pure internal combustion engines. Originally due to come into force in 2040, the Government has brought forward the ban to 2030. Between 2030 and 2035, new cars and vans can be sold with internal combustion engines if they can drive a significant distance with zero emissions (for example, plug-in hybrids or full hybrids), and this will be defined through consultation.
The Zero Emission directive here is key. Currently, Battery Electric Vehicles (BEV) are the main route that most manufacturers are following to deliver this. Moving through this decade will see increasing investment in Fuel Cell Electric Vehicles (FCEV) and the required clean hydrogen production and infrastructure to deliver this exciting next step. The Glass’s team currently see that there will be a strong mix of smaller BEVs whilst vehicles such as large SUVs, large vans and heavy commercial vehicles could see the benefits of FCEV moving forward.
For used vehicles, motorcycles and HCVs, eFuels offer an interesting alternative moving forward, especially as motorcycles and HCVs are not currently included in the Governments 2030 Road to Zero. However, the emissions from these fuels are still to be confirmed, especially particulate emissions which could still be a cause for concern.
Will there be an effect on supply due to the shortage of semiconductors?
Demand for semiconductors has soared during the pandemic as people, locked down at home, are buying new technology such as games consoles, laptops and TVs. Many of these products, including some laptops and next-generation games consoles, have sold out, or are subject to lengthy delivery delays. This is another factor that is currently affecting the supply of some vehicles from factories around the world. In the UK, the semiconductor shortage closed Honda’s Swindon plant in January for four days.
Are you expecting to see a reduction in the supply of vehicles into the UK due to the Rules of Origin Tariffs?
Although Glass’s does not predict a specific reduction in the supply of vehicles to the UK due to the Rules of Origin Tariffs (RoO), there are issues around the production of vehicles in the UK.
While the UK automotive industry avoided tariffs following BREXIT, the RoO requirements hidden within the new legislation are creating new barriers to trade. Before 1 January 2021, automotive products legally made in the UK could sell anywhere in the UK and the EU. From 1 January 2021, automotive manufacturers must provide proof that at least 40% of the value of the parts in a finished vehicle exported to the EU originated in the UK. This threshold climbs to 45% in 2023 and 55% in 2027.
With increasing battery-electric vehicle production, the need for domestic battery production is vitally important. Without this, OEMs are less likely to invest in the UK. The future must involve measures that can deliver long-term changes in the industry. There are ambitious targets to meet that address climate change and air quality goals. The fastest way to achieve these goals is to create business confidence and encourage the take-up of the latest low emission vehicles.
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