The sustainable revolution

Everyone’s read the headlines, seen the news reports and had their social media feed filled with net zero news. It’s the universal target to reduce humanity’s impact on the world and bring a bit more balance back to life.

It might seem overwhelming, but the aim of net zero is simple: reducing emissions and introducing methods to absorb carbon dioxide from the atmosphere should decrease the amount of greenhouse gases in the atmosphere and slow down climate change. It’s something that the UK has been striving towards for decades and is determined to achieve within the next 30 years.

The government’s Net Zero Strategy: Build Back Greener report states: “Since 1990, the UK has almost halved its greenhouse gas emissions. Thanks to the efforts of successive governments, we are almost halfway to ending the UK’s domestic contribution to man-made climate change, and in 2019 the UK became the first major economy in the world to legislate to finish the job with a binding target to reach net zero emissions by 2050.”

And while the shift to a more sustainable future isn’t solely reliant on the automotive industry making changes (every industry needs to change, with even small changes by individuals playing a part), there are some big shifts happening in the sector to help the country meet the 2050 target. So what’s happening?

The great ban of 2035

Unless you’ve been living off-grid for the past few years, you’re no doubt painfully aware of the debate about when the ban on new petrol and diesel vehicles will come into effect. It’s arguably the largest change in automotive in over a century and the biggest thing the industry can do to help meet the net zero target.

Originally, the government put its line in the sand for 2030, pushing for both the country and the industry to become leaders in new technologies. Then political leaders changed, electioneering started and the date was pushed back to 2035. And that date could change again if there’s a change in government and Labour come to power – it’s promised to revert back to a 2030 ban.

But whether it’s 2030 or 2035, there’s an elephant in the room that makes the headline date a little irrelevant. And that’s the Zero Emission Vehicle (ZEV) mandate, which forces manufacturers to sell zero emission vehicles – likely battery electric – or face hefty fines.

The ZEV mandate kicks in from 2024, when manufacturers must supply 22% of their range as zero emission. This percentage will then increase each year; by 2030, 80% of new cars and 70% of new vans sold in Great Britain will have to be zero emission, increasing to 100% by 2035. And if manufacturers don’t comply, they can be fined £15,000 for each vehicle that doesn’t meet the requirements. Figures from Dataforce estimate that fines could total £2.4bn in 2024 as firms struggle to meet the mandate.

“The recent decision to push back the ban on the sale of new internal combustion engine vehicles from 2030 to 2035 will undoubtedly affect EV adoption,” says Emma Carrigy, Research & Insight Manager at the IMI. “Manufacturers must still meet the ever-increasing zero emission vehicle targets. This is causing concern for 2024 as demand is unlikely to match the ambitious 22% target for all vehicle sales. The potential consequence is that manufacturers may decrease production or imports of ICE vehicles to avoid substantial fines.” So as politicians play with dates for when consumers have to shift away from combustion-driven vehicles, the timeline is already set in stone for manufacturers, which means the wider industry needs to be ready.

Rise of the mechanics

According to the RAC Foundation, there are currently more than 33 million cars on the UK’s roads. This includes over four million light commercial vehicles, 0.5 million heavy goods vehicles, 1.3 million motorcycles and 0.14 million buses and coaches, the vast majority of which are powered by combustion technology. Electrification is taking hold, but in certain areas rather than across the board. “Recent data from the Society of Motor Manufacturers and Traders (SMMT) highlights that the increase in battery electric vehicle (BEV) registrations is primarily driven by fleet purchases, which surged by 50.6%,” says Carrigy. “Conversely, private BEV registrations declined by 14.3%, indicating the hesitancy of private buyers towards EVs.”

A decline in privately bought EVs isn’t great for the automotive sector or industry emissions, but you need to look further down the line and assess the impact that fleet purchases will have in the future. 

“Fleet operators seed the aftermarket,” explains Hayley Pells, Policy and Public Affairs Lead at the IMI. “They’re the biggest purchasers of electric vehicles, and once those vehicles de-fleet, they are very likely to drop into the aftermarket. If you consider that the biggest fleet operator in the UK is Motability and they de-fleet about 4,000 cars a day, that’s an incredible number of vehicles that could eventually enter the private market.

“Your private EV owner is likely to stick with that vehicle from cradle to grave, and they’re going to be more likely to continue with their dealership journey. But the ones that enter the aftermarket after de-fleeting, all bets are off as those buyers aren’t as dealership-loyal and will be looking for an independent business to maintain them.”

That’s where the wider impact of the UK’s and automotive’s shift to net zero starts. It’s not simply about the type of vehicles being sold, but the availability of the skills required to keep those vehicles on the road. And it’s already starting to appear an incredible challenge.

People get ready

“Indications from across the sector show that the dampening effect of moving the ban on new petrol and diesel sales from 2030 to 2035 will be minimal, and so our current forecasts have not been altered,” says Carrigy. “The IMI predicts that by 2030 the sector will need 107,000 EV-trained technicians, increasing to 126,000 by 2032. Current estimates are that this will increase to 185,000 by 2035.”

The problem is that projections indicate a potential shortfall of qualified technicians by 2030, which could reach 13,000 by 2032 if the current trends persist. That means there will be a lot of customers who won’t be able to find businesses with technicians that have the skills or tools needed to work on their vehicles. And the message that everyone working in automotive needs to continue to upskill and reskill has been blurred.

“All our research suggests that those who have an immediate need to train are training,” says Carrigy. “Dealerships, emergency services, roadside assistance, they are all on the journey.” 

Arguably it’s the independent sector that’s in danger of falling behind. And with confusing announcements from government, an already noticeable skills pinch, and an increasing backlog of work, why would you take the time and money to train in something that may not be required anytime soon?

“I would say to members that nothing has changed,” says Carrigy. “EVs will continue to be part of the UK car parc and continue to grow. Private buyers of BEVs may slow over the next couple of years, however, though the amount coming in from de-fleet will mean there is still a significant amount of demand and need for skilled people to service and maintain them.”

Automotive is facing a culture shift as it moves away from a century of combustion to electrification, in whatever form that takes. Dates could shift but the end goal is the same: reduce the sector’s impact on the environment as it embraces a more sustainable business model.

This is an edited extract from IMI's new MotorPro magazine, received free as part of IMI membership