The UK government has relaxed rules regarding automakers requiring them to move towards selling electric vehicles as they attempted to dull some of the pain caused by new car rates for foreign cars sold in the US.
British officials said on Sunday that they would maintain the requirement to stop selling new petrol and diesel vehicles by 2030, but that the automaker has given them more flexibility to meet annual targets for electric vehicle sales between the current and 2030 deadlines, allowing them to sell more cars in later years when demand is expected to be high and face lower penalties. Authorities also said the hybrid vehicle could be sold until 2035.
Last month, President Trump unveiled a 25% tariff on imported cars and auto parts, overturning the complex supply chains supporting the global automotive industry. Duties on vehicles imported into the US came into effect last week, with collection of parts expected to begin next month.
“With global trade changing, we must go even faster in reshaping the economy,” British Prime Minister Kiel's starmer said in a statement.
On Saturday, British luxury automaker Jaguar Land Rover said it was suspending freight to the US this month as it evaluated changes to its trading terms. The US is the largest single-country export market for UK automobiles, with vehicles worth 6.4 billion pounds ($8.3 billion) shipped in 2023.
Even before the latest tariffs from the Trump administration, the UK's auto industry was struggling. Last year, automobile production fell to its lowest level in 70 years.
The industry group, Automobile Manufacturers and Traders Association, welcomed changes to the government's mandate of electric vehicles, but said more action is needed to increase consumer demand for these vehicles.
“The industry continues to be committed to decarbonizing road transport,” group CEO Mike Haws said in a statement. The goal of electric vehicle mandate is “very difficult, especially due to lack of consumer demand and geopolitical turbulence,” he added.
The government has also exempted small amounts of luxury manufacturers such as McLaren and Aston Martin from the regulations. Vans with internal combustion engines will also be allowed to be sold until 2035 alongside hybrid vans.
So far, the UK government has resisted fighting back with retaliatory tariffs on goods imported from the US. The Trump administration imposed a “baseline” 10% tariff on goods from the UK, but no additional “mutual” taxes apply to many other countries. Starmer says he remains “sluggish” and is working towards negotiating a technology-focused trade deal with the US.
However, the government was “prepared to intervene where necessary to protect UK businesses from the storm,” the prime minister wrote in the Sunday Telegraph.
