Carmakers said on Tuesday they will have to pay out nearly 6 billion pounds ($7.52 billion) in discounts and compliance costs to meet Britain's electric vehicle sales mandate for 2024.
"Profitability and viability are in jeopardy and jobs are on the line," Society of Motor Manufacturers and Traders (SMMT) CEO Mike Hawes warned in a statement.
Prime Minister Keir Starmer's spokesperson said the Labour government will launch a consultation on changing Britain's zero-emission vehicle mandate, but will stick to a 2030 deadline for phasing out new petrol and diesel car sales.
The previous Conservative administration required that fully electric cars must make up 22% of sales in 2024. Automakers face fines of 15,000 pounds for each non-compliant car, or they can buy credits from automakers that exceed the target.
Nissan (7201.T), which has a car factory in northern England had urged the government to ease up on the mandate, while Stellantis (STLAM.MI) threatened in June that it could close both its British plants without more EV incentives.
Stellantis said separately on Tuesday that it would close its Vauxhall van plant in southern England.
The Society of Motor Manufacturers and Traders (SMMT) said that in their efforts to meet the mandate, automakers will offer 4 billion pounds in discounts this year.
"The mandated targets have given manufacturers no option but to subsidise sales," the SMMT said. "Despite this, the industry looks likely to fall short of the 22% EV market share demanded."
As a result, automakers face compliance costs of around 1.8 billion pounds, the SMMT said.
($1 = 0.7980 pounds)
