Consumer Corner: Will Sunak’s U-turn on net zero see EV production start to stall?

When Rishi Sunak announced his plans to delay Net Zero targets for electric vehicles, energy efficiency in the home and new boiler rules from 2030 to 2035, one of the loudest critics was the car industry.

Unlikely as it seems that car makers would be flying the flag for environmental regulations to be implemented sooner, they said the decision by the government to push back a ban on new petrol and diesel cars by five years was deeply unhelpful.

But casual observers should be careful in thinking this position is altruistic. It also comes at a cost to those manufacturers who now have to decide whether to press ahead with long term plans to be all-electric in just six years or hold out until the extended 2035 deadline.

However, it would take a brave manufacturer to stop the transition and start upping the rate of petrol or diesel vehicles when consumer sentiment is going only one way.

Today, 16% of all new car sales are electric and it is the fastest growing category - although it has slowed as government incentives end.

Nissan has been fastest in announcing their future intentions, with the chief executive telling the BBC the company would continue to hit its target of selling only EV cars in Europe by 2030. Others are likely to follow suit and the extended target may well be reached early regardless.

But where does this leave the consumer who might be thinking about their next set of wheels?

Anyone paying attention will notice virtually all car adverts are now for electric vehicles. Most companies will continue to push their EV offering in the first instance and the new car market is unlikely to see an uptick in petrol or diesel vehicle sales.

With the focus for new vehicles set on EVs, this should, in turn, send down the price to parity with current non-EV models - although that remains predicated on the assumption that there will be enough supply of the raw materials required in battery technology to avoid price squeezes.

Therefore, anyone looking to buy a new car is likely to pick an EV model. However, those searching the second-hand market might see a different picture.

Second-hand EVs have been plummeting in price recently, as households delay changing to electric and opting for cheaper petrol or diesel vehicles instead.

Some believe the government's announcement could exacerbate this further - pushing drivers towards cheaper non-EV cars in even greater numbers - although others think continued price falls and improved public charging infrastructure could see a reversal in attitudes, especially if running costs for older vehicles keep rising.

Some might also be wavering on a purchase, hoping the government introduces scrappage scheme incentives - as happened in London in the run up to the ULEZ extension and believe higher running costs are worth it versus a larger initial outlay.

Either way, one thing remains unchanged; manufacturers will keep pushing electric vehicles on us and we shouldn't be surprised if the original 2030 deadline is reached regardless - not least because car makers have been told Labour would reverse the Conservative's plans if successful at next year's general election.