Ford is preparing to limit sales of its petrol cars in the UK to meet the government’s zero-emission vehicle targets. The company’s European boss has also warned that Britain’s new ZEV mandate is likely to push up vehicle prices, as manufacturers work to claw back the cost of any fines for non-compliance from its customers.
Martin Sander, Ford’s European general manager, said at a Financial Times summit that the only way he could avoid hefty fines under the UK’s ZEV mandate was to divert sales of its combustion-engine cars to other countries. He also pushed back Ford’s plans to only sell electric cars in Europe by 2030, in response to dwindling interest from consumers.
‘We can’t push EVs into the market against demand,’ he said. ‘We’re not going to pay penalties. We are not going to sell EVs at huge losses just to buy compliance.
‘The only alternative is to take our shipments of [engine] vehicles to the UK down and sell these vehicles somewhere else.’ Sander added: ‘I don’t know if consumers in the UK would like seeing [engine vehicle] prices going up.’
Currently, the ZEV mandate states that 22% of the cars a manufacturer sells in the UK must be zero-emission. So, for every 100,000 cars Ford sells, only 78,000 of them can be powered by combustion engines.
The remaining 22,000 cars must be fully electric or powered by a zero-emission fuel such as hydrogen. That’s a serious challenge when you consider that, overall, EVs have accounted for just 15.7% of new car sales in the UK since the start of the year.
The penalties for non-compliance are huge, too. For every combustion-engine car that Ford sells over that 78,000 threshold, it’ll be fined £15,000 per car. Hence why Ford is considering the rather drastic measure of throttling its petrol car sales in the UK.
Plus, the targets for EV sales will increase every year, reaching 80% in 2030 and 100% in 2035 when the sale of new petrol and diesel cars will be banned. That means it’ll get harder and harder to buy a petrol Ford as we approach the end of the decade.
Ford also only has two electric cars in its current line-up – the Explorer SUV and the Mustang Mach-E –with the pure-electric version of the Puma arriving later this year. That means the brand is less well-placed to absorb the blow from the ZEV mandate as a company such as BMW, which has a comprehensive range of seven electric cars.
Interestingly, Ford is the only brand which has openly discussed holding back sales of its combustion-engine cars to meet the targets set by the ZEV mandate.
After the FT summit, Sander posted on his LinkedIn profile, saying: ‘Wherever I go these days I am being asked about the uncertainties of the transformation to EVs, hurdles and new competitors.
‘My optimistic message might surprise some: Ford has been in the market for 120 years, and we plan to be in the market in 120 years. So we have to compete and become ever more efficient. Uncertainty is part of the business now. We have to embrace it and enjoy it!’
What does this mean for you?
Well, if you’re in the market for a new, petrol-powered Ford, you might soon find it a lot more difficult to buy one. And, if you do happen to be able to secure a car, you could end up paying a lot more money for it.
Plus, if other manufacturers follow in Ford’s footsteps, it will probably be a lot more challenging to buy a combustion-engine car in the UK, simply because the pool of options will be restricted by the ZEV sales caps.
