Electric vehicle targets 'will not be weakened' despite pressure

Published On Nov 17, 2024, 9:56 AM

The UK transport secretary has reaffirmed that the mandate requiring electric vehicles (EVs) to make up a certain percentage of car sales will not be weakened, despite industry pressure and a downturn in global demand. The current rules require 22% of a firm's car sales to be EVs this year, increasing annually until a total ban on new petrol and diesel cars in 2035. The Society of Motor Manufacturers and Traders (SMMT) predicts that the industry will likely miss this year's EV targets. Talks between government officials and car makers are set to discuss potential concessions regarding penalties for non-compliance with these mandates, amidst calls for government grants and tax changes to support the EV transition.

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Stock Forecasts

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Positive

Given the UK government's commitment to maintaining the strict EV sales mandate and the urgency surrounding electric vehicle adoption, the automotive sector, particularly those heavily invested in EV technology, may see increased scrutiny and financial strain if they fail to meet targets. Companies effectively navigating these transitions or investing in EV infrastructure could benefit in the long run.

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Negative

Conversely, car manufacturers struggling to adapt to these stricter regulations, especially those reliant on traditional internal combustion engines, may face challenges. If they cannot meet the demand for EVs or if job cuts arise due to compliance issues, they could see negative impacts on their stock performance.

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