Ford, one of the world’s largest automotive brands, is grappling with a significant challenge in the UK: meeting stringent government-mandated electric vehicle (EV) sales targets. Falling short of these goals could result in fines exceeding £100 million, further straining a company already facing declining market performance.
Ford’s Struggle to Meet the ZEV Mandate
Under the UK Government’s Zero Emission Vehicle (ZEV) mandate, manufacturers are required to ensure that a certain percentage of their vehicle sales are fully electric. For 2024, the target is set at 22%, rising to 28% in 2025 and 80% by 2030. These ambitious goals aim to accelerate the transition to a zero-emission future, but they pose substantial challenges for automakers.
In the first 11 months of 2024, only 6.8% of Ford’s vehicle sales in the UK were electric, well below the 22% threshold. According to New AutoMotive, the company may fall approximately 7,000 EVs short of its target.
This shortfall leaves Ford exposed to significant penalties, as manufacturers face fines of £15,000 for every vehicle they fail to sell under the mandate. However, mitigating measures such as emissions reductions across fleet models, rolling over shortfalls into later years, and trading credits with other carmakers provide some flexibility.
Declining Market Share and Overall Sales
Ford’s challenges in the EV market come amid broader struggles. The company’s overall vehicle sales in the UK have plummeted by 24% in 2024, with its market share shrinking to just 5%—a stark contrast to its 15% dominance a decade ago.
Once Britain’s best-selling manufacturer, a title it held annually from the 1970s to 2020, Ford now trails competitors like Volkswagen, BMW, and Audi. According to the Society of Motor Manufacturers and Traders (SMMT), Ford sold 102,226 vehicles in the UK year-to-date, behind rivals such as Volkswagen (154,000), BMW (116,000), and Kia (108,000).
Ford’s slow adoption of EV technology is a key factor in its struggles. The company has only recently launched the Puma Gen-E, an electric version of the UK’s best-selling vehicle, priced at £29,995. Other EVs in Ford’s lineup, including the Mustang Mach-E, Explorer, and Capri, are priced above £43,000, potentially limiting their appeal in a market where affordability is a significant concern.
Lisa Brankin, Managing Director of Ford of Britain, acknowledged the challenges in a recent statement:
“The end goal is not in question, but current demand for electric vehicles is lower than expected and not in line with the mandated trajectory. For manufacturers like Ford, who have invested billions into new technologies and advanced manufacturing, there needs to be greater flexibility built into the scheme and government-backed incentives to help encourage customers to make the switch.”
The ZEV Mandate and Potential Revisions
The ZEV mandate, introduced by the previous Conservative administration, is designed to drive the adoption of electric vehicles as part of the UK’s broader strategy to combat climate change. However, the ambitious targets are under review, with automakers like Ford urging the government to introduce more flexibility and incentives to support the transition.
Brankin’s comments reflect a broader sentiment among manufacturers that while the shift to EVs is inevitable, the pace of change may need adjustment to align with market realities. Consumer hesitancy, high costs, and limited charging infrastructure remain significant barriers to widespread EV adoption.
Despite its current struggles, Ford is not standing still. The company continues to invest in electrification and has emphasized its commitment to improving its zero-emission vehicle volume and overall CO2 performance. Ford’s approach includes closely monitoring market conditions and adoption rates while maintaining planned volumes of internal combustion engine (ICE) models.
Additionally, Ford could leverage the emission-trading scheme under the ZEV mandate to offset some of its shortfalls. By purchasing credits from more successful EV manufacturers, Ford can mitigate immediate penalties while ramping up its EV production and sales.
Ford’s predicament underscores the challenges many legacy automakers face in transitioning from ICE vehicles to EVs. While startups and newer entrants like Tesla have focused exclusively on electric vehicles, established manufacturers must navigate the complexities of overhauling decades-old supply chains, production methods, and market strategies.
Moreover, the financial stakes are high. Missing ZEV targets not only results in fines but also risks damaging brand reputation and investor confidence. For a company like Ford, which has already seen its market position decline, meeting EV sales targets is not just a regulatory requirement but a critical factor in its long-term viability.
Ford’s struggle to meet the UK’s ZEV mandate highlights the broader challenges of the global shift toward electric mobility. While the company faces significant hurdles, including a potential £100 million fine, its recent investments in EV technology and ongoing advocacy for more flexible regulations suggest that it is actively working to overcome these obstacles.
As the automotive industry continues to evolve, Ford’s ability to adapt and innovate will determine whether it can reclaim its position as a market leader in the UK and beyond. For now, the company’s focus must be on accelerating its EV rollout, addressing consumer concerns, and aligning its strategy with both market demand and regulatory requirements.
