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Spotlight: Kia CEO believes 2030 ICE sales ban can happen

Government clarity and incentives needed to stimulate retail EV sales.
240717 paul philpott kia

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17 July 2024

A ban on selling internal-combustion engined vehicles after 2030 can still happen, according to the head of Kia UK, but it will need clarity from the Government and incentives to stimulate retail sales.

The then Conservative Government announced in November 2020 that sales of all new petrol and diesel cars would be banned in 2030, with plug-in hybrid (PHEV) and full hybrid (HEV) sales continuing until 2035 ‘if they can drive a significant distance with zero emissions’ which it was stated would be determined by consultation.

In September 2023 the ban was put back until 2035, but in its election manifesto the Labour Party pledged to return the ban to 2030. Labour duly won the General Election in July, but so far nothing further has been said on the manifesto pledge and there was no mention of the ban in new Prime Minister Sir Keir Starmer’s first King’s Speech on 17th July.

Meanwhile latest Society of Motor Manufacturers & Traders figures show EV sales growth, up 6% in 2024, being entirely maintained by the fleet market – registrations up 22% with retail figures slipping back by 12%.

Speaking to Business Motoring at the launch of the new Kia Sorento and Picanto, Paul Philpott, CEO of Kia Motors UK, stated that bringing in the ban in 2030 was still possible, but described previous Government messaging on it as a communications disaster.

“It was firstly (going to be) 2030 with a lack of clarity over whether you could sell PHEVs and HEVs in the period 2030-35 – that was never clarified,” Philpott said.

“It was then put back to 2035 and I’m not sure what really changed, because we still need to do 80% EVs by the end of 2030,” he added, referring to the Zero-Emissions Vehicle (ZEV) mandate introduced this year – it requires 22% of a manufacturer’s sales in 2024 to be zero-emission, rising to 80% in 2030.

“So there’s only 20% left and that 20% will likely be PHEVs and HEVs, so (the previous Government) could very easily have said that we will keep the ban at 2030, but we’ll now confirm you can sell PHEVs and HEVs up to 2035. They didn’t do that, they just said ‘we’re moving back to 2035.’”

Philpott believes that the new Government will most likely go for a 2030 ban while allowing continuing sales of PHEV and HEV vehicles until 2035. “(That) is pretty well where we were a few years ago and I’m not sure in practice it will be anyone’s biggest challenge.”

He sees a bigger challenge for manufacturers in the early years, meeting the requirements of the ZEV mandate. “We (Kia) are on track to deliver 20% (EV sales) this year because we have planned for it for many years.

“We bought our first EV out in 2014, 10 years ago, we were a volume player in EVs in 2019, five years ago. If you set your stall out, you’ll be fine. By 2027 we will have nine EVs, cars and commercials combined, in our range.”

Dear Prime Minister…

So what points would Philpott make if he could have 10 minutes with new Prime Minister Sir Keir Starmer, or his even newer Transport Minister Louise Haigh? “I think I would be saying that for us around 70-75% of demand for EVs is fleet. You incentivise them with beneficial tax conditions for company car drivers, and that’s working.

“Only 25 to 30% of our demand, and it is real demand, is retail, and that’s per SMMT registration systems. Salary sacrifice is effectively taking retail customers that use a different acquisition model and counting them as fleet so they get BIK (benefit-in-kind) benefits.

“So alongside continued investment in charging infrastructure, please consider retail incentives for the next two years – which is probably all that would be needed.”

Philpott believes such a measure would show that the Government is serious about the transition and wants retail buyers to recognise that EVs are the future. “At the moment it feels as a manufacturer that we have a big stick hitting us with few carrots for the retail customer.”

He also argues that the Government could actually see a revenue benefit from offering retail incentives. “We have long memories back to the scrappage scheme in 2009 – the Government provided £1000 and we matched it with a £1000 discount and suddenly consumers were back in the market. They increased the volume, it richened the mix of everything and the Government ended up getting more in VAT revenue.

“The same is still true – EVs are more expensive than ICE, PHEV or HEV cars so if you can increase your EV mix with a bit of Government incentive and have consumers actively demanding them, the Government will see their VAT revenue increase – it will be self-funding.”

240717 lisevlineup
Kia has invested heavily in electric and is “110% committed” to the switch.

Confusing messaging

Incentives would be an encouragement to improve EV retail sales, but Philpott also believes consistent messaging from the media is an important element. “Some of the bull**** that is spoken about EVs in the media and that is categorically wrong fuels the debate.

“It goes back to the story of ‘queues of Teslas at Gretna Green services’ on Boxing Day 2020. That was the start of the negative publicity towards EVs and we’ve since had potholes being caused by EVs, that they take down car parks, fires… just utter rubbish.”

He also wants to see consistency from the Government; “I’d be asking for consistent Government policy over a long period of time and advance warning of any changes that are coming up so that we can plan for them.”

Philpott sees no alternative to the switch to electrification, in which he says Kia is “110% invested. We invested in hybrid, in plug-in hybrid and very heavily in EVs. We will see over the next three years a dramatic change in our model mix.

“This year will be the first when PHEV, HEV and electric combined are 50% of our sales. That’s a landmark we won’t go back on – it’s only going to go one way and I’m confident we will hit the Z mandate targets with the products that we have coming.”

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Andrew Charman

Andrew Charman has been a motoring journalist for more than 30 years, writing about vehicles, technology and the industry. He is a Guild of Motoring Writers committee member and has won several awards including for his business coverage.

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