► MG commercial director speaks out about the ZEV mandate
► Suggestion EV sales growth in 2024 is an anomaly
► Does Motability account for 25,000 electric car sales?
The government’s zero emissions vehicle (ZEV) mandate has caused a ‘fundamental shift’ to the UK’s automotive market and has led manufacturers to do ‘whatever they can’ to achieve electric car targets.
Commercial director at MG Motor UK, Guy Pigounakis, spoke frankly about the mandate completely changing the way cars are sold in the UK as many manufacturers scramble to achieve targets.
What is the ZEV mandate?
The ZEV mandate, introduced in 2024, requires car and van manufacturers to sell a certain percentage of new EVs each year otherwise they face steep fines unless they can trade credits with other manufacturers with surplus EVs. In 2024, firms are required to sell 22 per cent of electric cars and 10 per cent of electric vans, with some firms well on track to achieve or exceed the target, while others that currently sell few or no EVs languish far behind and face tough business decisions.
Pigounakis said: ‘In my lengthy career I’ve never seen a piece of legislation fundamentally change the way manufacturers design and engineer cars, bring cars to market, even down to pricing and distribution. It’s fundamentally changed the whole industry, and will carry on doing so if the ZEV mandate continues.’ While the government announced earlier this week that they would review the ZEV mandate, the MG boss said he ‘found it hard to believe the government is going to do a complete U-turn’ and he expects it ‘won’t change to any great extent’.
Isn’t MG an EV success story?
MG is one of those car firms in the clear, having a year-to-date EV sales mix of 27 per cent, helped mainly by the MG4, the UK’s third most popular electric car in 2024. The firm is also confident it can meet the mandate in future years, even without any changes.
Despite this, Pigoukanis, a Rover veteran who then worked as sales director at Hyundai for 19 years, said: ‘I do have sympathy for other manufacturers that have invested in other technologies [hybrid] and are now very disadvantaged in the UK.”
While EV sales are up 14.8 per cent year-to-date overall, and the current overall EV mix is 18.1 per cent, Pigounakis said that ‘like all averages, you need to look at the extremes and they are stark’.
The reality of electric car sales in the UK
The MG director also said closer inspection was needed to establish where EV growth is coming from. While EV sales have grown by around 38,000 units so far year-to-date, this hasn’t been fuelled by usual retail sales and fleet channels.
“Growth in EVs this year is driven by Motability, driven by demos and in the main by manufacturers own registrations, and this is driven entirely by manufacturers doing whatever they can to hit the ZEV mandate they have.”
According to data seen by CAR Magazine, 25,500 more EVs have been sold on Motability this year than in 2023.
Pigoukanis said: ‘Motability has now decided they have too many EVs, and it’s making it very expensive for manufacturers to put electric cars on its fleet. That is not the channel it was.
‘There’s a very high rejection level amongst electric cars on Motability, and that’s down to the pressure manufacturers have put on their dealers to sell electric cars, so if a Motability customer comes in wanting a car, they’ve been talked into an EV that doesn’t suit their needs.’
Pigounakis also said 2024 had also been a year where manufacturers had ‘too many cars’ and ‘not enough customers’.
‘I think every manufacturer now has far more cars than they’ve got customers for. So this massive turnaround in supply and availability has really developed over the last 14-15 months.
‘This year has also seen brutal discounting. This discounting is particularly prevalent in EV market, driven by oversupply and reduced demand as manufacturers scramble around to try and hit their ZEV mandate targets. Too many cars, not enough customers, and manufacturers trying to fix that with more aggressive and expensive consumer incentives in the marketplace. This situation of having more cars than customers isn’t going to go away.’