Damage to car industry confirmed

Today’s figures show that over the last year to end January new diesel car sales in the UK collapsed, falling by 36%, as a result of the heavily negative attitudes towards diesels. Petrol car sales also fell, whilst battery and hybrid sales rose strongly from a small base. Fully electric vehicles are still only 2.7% of the market. In the month of January alone overall new car sales fell by 7.3%.

It comes as no pleasure to report my forecasts proved accurate when I warned that the higher tax rates, squeeze on loans, new regulations and general hostility to diesels would do damage to the new car industry.

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69 Comments

  1. Edward2
    Posted February 5, 2020 at 2:55 pm | Permalink

    Very sad but very predictable.
    Consumers dislike predictability.
    Now we have the second most expensive purchase decision after a home mired in uncertainty.
    The automotive industry must be in a panic as first they are required to move from petrol to diesel powered vehicles now are told both these power sources will soon be banned by law.
    Not just the challenges of achieving the technology required but deciding investment decisions.

    There are huge potential problems with the switch to electric vehicles.
    First we need to double electricity generation.
    Second we need to create 400 charging points a week starting now.
    Thirdly we need to decide how people in flats and houses where you park on the street charge their cars.
    The danger is we will destroy on the altar of climate crisis a major industry which employs many millions and develops billions in tax revenues.

    • Mike Wilson
      Posted February 5, 2020 at 3:54 pm | Permalink

      Never mind. We’ll find something else to do.

      • Edward2
        Posted February 6, 2020 at 7:28 am | Permalink

        Your sarcastic response doesn’t give us any ideas on how the problems will be addressed.
        Try living in rural areas where there is little public transport.
        Decisions like this are made in London.

    • Ian Wragg
      Posted February 5, 2020 at 5:07 pm | Permalink

      Quadruple power generation.
      Watch for fine words but no action by Germany, USA Jaan, India and China.
      Boris in self destruct mode.

      • L Jones
        Posted February 6, 2020 at 9:32 am | Permalink

        Mr BJ used to appear to be his own man. But with every day that passes he seems to be in thrall to his ”EU friends”. Perhaps everything he is doing or saying is part of the appeasement ploy.

    • zorro
      Posted February 5, 2020 at 5:26 pm | Permalink

      Meanwhile in China and India…..

      zorro

      • dixie
        Posted February 7, 2020 at 8:40 am | Permalink

        … they are banning ICE vehicles as well.

    • Alan Jutson
      Posted February 5, 2020 at 6:27 pm | Permalink

      Edward2

      Do not forget new Hybrid cars are also on the list to be banned, with the same dates as Petrol and Diesel.

      Difficult to make it up really.

      • Fred H
        Posted February 6, 2020 at 8:07 am | Permalink

        get shares in foldable bike builders NOW!

    • steve
      Posted February 5, 2020 at 9:23 pm | Permalink

      Edward 2

      I’d like to see an open inquiry as to who holds the world monopoly on lithium….there you will find out who is working the scam.

      The perpetrator is always found amongst those who benefit most.

      • hefner
        Posted February 6, 2020 at 11:15 am | Permalink

        Look at http://www.miningglobal.com
        Most of Li mining activities are in Chile, Australia, China, Quebec. The 10 biggest companies by decreasing order of importance with HQ locations between parentheses are:
        Albemarle (USA) mines in China, Australia
        SQM (China) mines in China
        FMC (Argentina) mines in ?
        Sichuan Tianqi (China) minesin Australia, China
        Jiangxi Gunfeng (China) mines in Australia
        Lithium Americas (USA) mines in China
        MGX Minerals (Canada?, USA) mines in Quebec
        Nemaska Lithium (Canada) mines in Quebec
        Galaxy Resources Ltd (?) mines in Argentina, Australia
        Wealth Minerals (Canada) mines in Chile

        So one can now invest in the future?

    • Everhopeful
      Posted February 5, 2020 at 9:45 pm | Permalink

      I imagine that all the green/electric stuff dovetails very nicely into the long term aim of drastically reducing the number of cars on the roads.
      Probably those who are able to travel will be forced into driverless electric vehicles.

    • dixie
      Posted February 7, 2020 at 7:50 am | Permalink

      I have no say over government policy and disagree with the current panic strategy especially the banning of hybrids. I also have no say over commercial decisions other than as a consumer but if you are seeking observations and suggestions on how some of these issues might be addressed;

      COST – Deloittes are projecting capital cost parity between ICE and EV around 2022. VW and other manufacturers are already shifting to EV biassed production and the scale together with battery developments should bring the average cost down. Currently the Skoda CitiGo IV is £158 per month/WLTP of 160 miles and the Hyndai Ioniq 38kWh is £228pm/WLTP of 190 miles.

      POWER GENERATION – As far as I am aware the grid has enough capacity but not if everyone charges at the same time. But, EV owners don’t all charge at the same time now. Note: No-one is complaining that the telephony network cannot cope with 100% call utilization.
      Mitigations include smart charging to stagger over-night charging and exploit lower cost tariffs, domestic PV and batteries to cover charging load and time shift as necessary. One opportunity with smart charging is to incorporate V2G and so use the EV fleet as grid storage for balancing and backup maybe on a community/micro-grid basis.

      RANGE and CHARGING – Battery technologies are developing to meet the general needs – 5 minute fast charge, longer range and better cold weather performance. R&D and announcements (eg IBM, Enevate) around Sodium and Silicon based chemistries suggest these products will available in the next few years, but there are always trade-offs and no promises.

      CHARGING POINTS – 5 minute fast charge and extend range will allow the current refueling station model to be retained but by it’s nature charging can be done at home, work and destination parking. Note that the majority of EV users do not charge from empty to full but tend to keep SOC at 20 – 80% so charge times will typically be much shorter than the apocalyptic examples usually complained about.

      There are not enough charging points now and more must be built though the higher range faster charge systems will reduce the queuing. Another direction is wireless charging, this could address the street parking problem and safety/copper theft issue with cables, however I think the faster-bigger battery and station charging will be the predominant solution.

      Technologies, services and products do meet some peoples needs today and more in the next couple of years. But the government’s direction and actions without any committed product releases and generation plans to support their position suggest that politicians and civil servants have no clue and are floundering.

    • Martin in Cardiff
      Posted February 7, 2020 at 5:02 pm | Permalink

      John only quotes figures for the home market.

      It would be helpful if he included those for our ex-partners in the European Union, who might well be looking for other suppliers than the UK, given that there remains the possibility of tariffs, if Johnson “walks away”, as urged by commenters here and implied by himself.

  2. Edward2
    Posted February 5, 2020 at 2:57 pm | Permalink

    typo UN..predicability

    • John Hatfield
      Posted February 5, 2020 at 4:58 pm | Permalink

      Politicians solution. If there is a problem, no deed to correct the problem, simply ban the product. I read somewhere that new diesel cars are much less polluting. Too late, they are banned. Same with petrol engines shortly.

      • John Hatfield
        Posted February 5, 2020 at 6:24 pm | Permalink

        Missing an inverted comma after politicians’.

  3. Andy
    Posted February 5, 2020 at 3:17 pm | Permalink

    Clearly it is nothing at all to do with your Brexit.

    Except, in the real world, it is mostly because of your Brexit.

    • Edward2
      Posted February 6, 2020 at 7:30 am | Permalink

      You need to explain your odd comment Andy.

    • Fred H
      Posted February 6, 2020 at 8:06 am | Permalink

      even the high tides are all down to Brexit.

  4. The Prangwizard
    Posted February 5, 2020 at 3:19 pm | Permalink

    Job losses to come. I hope your government is happy. It will be given its authoritarian and green obsessions

  5. jerry
    Posted February 5, 2020 at 3:45 pm | Permalink

    What, you mean the ever growing reliability of cars over the last 20 years (and very significantly in the last 10) plays no part in some people not seeing any need to change their cars so often?! How many manufactures now offer extended warranties, most cars now still drive like new at 50k, even at 100k if the bodywork has been cared for and the mechanicals services regularly.

    So unless the private owner is wanting the latest registration year to show off…

  6. Mike Wilson
    Posted February 5, 2020 at 3:52 pm | Permalink

    Damage to the new car industry? Who cares? It is environmental insanity to keep buying new cars. Mine is 7 years old and I am going to keep it for another 7 years. At least. I don’t care how cheap you make it to borrow, I won’t buy a new car.

    • Edward2
      Posted February 6, 2020 at 7:36 am | Permalink

      Cars are only 15% of city pollution.
      Industrial plant and equipment, construction industry plant and equipment, planes, helicopters, trains, buses, coaches, vans, lorries, log burning stoves, bonfires, fireworks, barbecues, taxis, motorbikes, mopeds, scooters..
      And new cars are much cleaner that older cars.

      • jerry
        Posted February 6, 2020 at 8:47 pm | Permalink

        @Edward2; “And new cars are much cleaner that older cars.”

        I suspect that’s a very simplistic statement. Are you counting the pollution caused during the entire manufacturing process of new cars, and what about end of life disposal the older cars being replaced, the latter often prematurely.

        • Edward2
          Posted February 7, 2020 at 11:27 am | Permalink

          I was talking about just the CO2 output of the latest designs as it is what governments are obsessed about.

          I agree with you that in “dust to dust” studies the best car are those that are still running after many decades.

          • jerry
            Posted February 8, 2020 at 7:11 am | Permalink

            @Edward2; I was talking about just the CO2 output of the latest designs”

            Not sure you are correct about CO2 emissions, after all CO2 often being the end result of the catalytic converter reaction to reduce the more harmful unburnt hydrocarbons & NOx … and why not, after all real scientists know that CO2 is mere harmless plant food!

  7. The Prangwizard
    Posted February 5, 2020 at 4:05 pm | Permalink

    Presumably there will be countries which will not wish to follow the Climate insanity. with the UK an electric only market. Other countries will be mixed or just plain old fashioned. How will manufacturers plan their production and sales. Could we be left out on a limb?

  8. Lifelogic
    Posted February 5, 2020 at 4:18 pm | Permalink

    Indeed well it is simple why buy a new petrol or diesel car that might soon be banned by councils (like Bristol) or central governments. But also why buy an new expensive electric car when they are so expensive, limited in range, take ages to recharge, depreciate rapidly, the battery decays rapidly, they need charge points too and soon after you buy then the state will find a new way to tax you on them so as to replace fuel tax.

    Plus we have absurd legal lending restrictions on banks. Best just to keep you £1000 jalopy. My families three jalopies cost far less than one small electric car would in finance costs and depreciation and gives me the choice of a seven seater estate, a small convertible and a five seater. Plus they are far better, more interesting and safer cars and can do 700 miles and then be filled up in three mins for another when I go skiing or similar. Best to sit on the fence. Why one earth are Tesla shares so absurdly expensive?

    • Lifelogic
      Posted February 5, 2020 at 4:44 pm | Permalink

      The absurd FCA even encouraging the banks to rip of customer with overdraft charges of 40% or even nearly 80% (this only to there UK customers) the ones whose taxes bailed some of them out! Overseas branches have lower rates as they do not have the idiotic FCA.

  9. Stred
    Posted February 5, 2020 at 5:01 pm | Permalink

    The civil servant who worked with Labour to create the Climate Change Act and is as Green as they come has recently been put in as head of the Energy regulator. Instead of regulating the companies on behalf of the consumer he is telling consumers to get rid of their cars and boilers. It looks like they have taken over the government, despite only getting around 5% of the vote. He actually says that changing everything to suit the wind industry will be cheaper because they have dropped their prices suddenly to a third of what we are paying now under the contracts for difference that he invented when at Decc. Someone with engineering qualifications needs to investigate and fast.

  10. Ian Wilson
    Posted February 5, 2020 at 5:15 pm | Permalink

    Sadly you are all too correct.

    Ministers are pushing electric cars which are anything but ‘green’ apart from reduced emissions in towns. Mining for batteries is very energy intensive, requires huge volume of excavation (around 500 times the battery weight) and involves dirty and dangerous mining, especially for cobalt.

    Nor is the much-touted renewable electricity ‘green’. The Scottish government has revealed 13.9 million trees have been felled to build wind farms, perhaps scaling up to 20 million for the whole UK. That sounds an environmental disaster to me. In my book power from domestically produced fracked gas would have been far more benign/ Why is it everything promoted by the Green Mafia damages the environment worse than fossil fuels?

    • L Jones
      Posted February 6, 2020 at 8:02 am | Permalink

      ”Why is it everything promoted by the Green Mafia damages the environment worse than fossil fuels?”
      Because there’s a lot of money to be made in destroying the environment, and then campaigning to reverse the effect. It’s all a money-making scam.

    • Fedupsoutherner
      Posted February 6, 2020 at 8:33 am | Permalink

      +1

  11. Treacle
    Posted February 5, 2020 at 5:20 pm | Permalink

    We are living in a golden age of motoring. Now, you can drive from the south of England to Scotland in a day, comfortably. In only fifteen years’ time, the same journey will take three or four days, with overnight stops in, say, Peterborough, York and Edinburgh. It will be like a return to the Regency period, with people staying overnight in inns beside the road while the horses, or electric cars in this case, are given six to eight hours to recharge their batteries.

    • Fred H
      Posted February 6, 2020 at 8:04 am | Permalink

      we’ll need all the horse manure for the fields growing our veggie food.

  12. Iain Gill
    Posted February 5, 2020 at 5:41 pm | Permalink

    you should see the problems hiring freelancers with the IR35 nonsense flying around

  13. what tiler
    Posted February 5, 2020 at 5:49 pm | Permalink

    Best thing governments can do is butt out. Every time they interfere it goes horribly wrong.

    • Sharon Jagger
      Posted February 6, 2020 at 5:17 pm | Permalink

      Wat Tyler

      Agreed!

      And it’s all looking increasingly communistic in actually banning the production of petrol and diesel cars. And banning gas boilers etc!!

      Whatever happened to freedom of choice?
      Whatever became of the saying, “do not put all your eggs in the same basket”?

      Seems we’re embarking on the next battle (everything electric being powered by fans and solar panels) before we’ve barely completed the last one. (Brexit)

  14. agricola
    Posted February 5, 2020 at 5:52 pm | Permalink

    The political announcements that precipitated this slowing of the market is a classic example of opening mouth before engaging brain. As I have said earlier we should gather together a technically qualified and open minded group to assess the current cleanliness and the future potential for greater cleanliness of the internal combustion engine and the fuels on which it can be run. The PM and government should have faith in the technically informed and cease responding to the green lobby and schoolchildren.

    Have you for instance discussed the subject with the likes of Mazda, Nissan, Ricardo et al. I do not claim they have all the answers but you would be well informed before entering the fray. As with windmills, I suspect there are many vested interests at play.

    • ian terry
      Posted February 6, 2020 at 9:41 am | Permalink

      agricola

      As with windmills, I suspect there are many vested interests at play.

      Thats being a bit cynical, thinking like that.

    • dixie
      Posted February 7, 2020 at 8:15 am | Permalink

      I agree you must include the fuel chain in your planning, where is the fuel going to come from and how will any complications/entanglements be dealt with. Much debate seems to ignore that issue and dwells on clean burn etc.

      You can source hydrocarbon fuels from other than oil but there are consequences.

      Personally, I think we will have to move away from the single “oil/gas fuel” approach to multiple generation and storage technologies.

  15. Edwardm
    Posted February 5, 2020 at 6:04 pm | Permalink

    Very annoying when your clear predictions about the negative effects of policy were ignored – oddly contrary to Boris’s eagerness to boost economic activity.

  16. Fedupsoutherner
    Posted February 5, 2020 at 7:05 pm | Permalink

    If we are to achieve 100% carbon free does that mean our armed forces will have to use battery powered vehicles, war ships and tanks? What about farm machinery? Ambulances, fire engines? It’s all utter madness and will achieve nothing but to line the pockets of the scammers and those with their noses in the troughs. That normally includes a few government ministers.

    • ian terry
      Posted February 6, 2020 at 9:45 am | Permalink

      F U S

      Steady that line of thinking for our ministers is just too off of the wall.

      If truth be known they haven’t even thought about it.

  17. Everhopeful
    Posted February 5, 2020 at 8:10 pm | Permalink

    Still …on the bright side no one will ever be able to blame Brexit for a failing car industry. It will be entirely down to going green!
    We’d better get our skates on and start making reasonably priced electric cars, boats and planes.

    • ian terry
      Posted February 6, 2020 at 9:55 am | Permalink

      Everhopeful

      JLR should withdraw from the 100% electric engine plant and go hell for leather onto hydrogen propulsion. It would be more suited for their product range and a lot of their manufacturing plant can be utilised. The government should get behind them and label the exercise as a more reliable plan B .

      It will take engineers and specialist in infrastucture projects a lot less time to come up with a better solution as to the electric alternative. The scrappage of electric cars still has to be addressed, same as wind turbine blades and solar panels

      • dixie
        Posted February 7, 2020 at 8:21 am | Permalink

        Hydrogen cars use fuel cells to drive electric motors – you replace a battery that is recharged with a fuel cell that is re-fuelled with H2.

        H2 is not a low cost, low effort, low risk alternative, an H2 refuelling station in Norway blew up last year.

        And you still need to generate the energy to generate the H2 whether by thermal process or electrolyzer. The root of the problem is generating energy.

        • hefner
          Posted February 7, 2020 at 8:39 am | Permalink

          +1

  18. BOF
    Posted February 5, 2020 at 8:55 pm | Permalink

    There has always been a war on the motorist and it has now reached a new level.

    Personally, knowing what I do know about electricity generation, usage and electric vehicles, I will never buy an EV as I am now sure that much of the noise coming out of Government is about control. Also, I am quite certain that they are wrong but in ten or fifteen years time, when all the predictions have proved false, endless justification will be conjured up to put the blame elsewhere

    Is the Conservative party the very worst party of Government, except for all the others?

  19. steve
    Posted February 5, 2020 at 9:10 pm | Permalink

    JR

    All very predictable I’m afraid…….and plenty of warnings were given but were ignored.

    I’m not really a diesel lover myself, I only have an old diesel van, but what I am sympathetic to is the millions of motorists getting shafted time and time again by every elected government.

    They need to keep their slimy fingers off things they don’t understand, and stop listening to grey haired old twits of experts who themselves are heavily biased.

    Motorists always get it right up the khyber, it’s time we started fighting back.

  20. Peter Wood
    Posted February 5, 2020 at 10:27 pm | Permalink

    Good evening,

    This is a normal ‘social changeover’ event. First, there is reluctance to accept new technology until it is better understood, slowly gaining acceptance, then it increases suddenly, quickly reaching a tipping point when it almost instantly replaces the previous technology. With cars, the tipping point will be when demand for petrol falls to a low level such that it becomes uneconomic to produce and use it.

    New battery technology, providing fast charging and 500 miles will seal the result.

    • oldtimer
      Posted February 6, 2020 at 7:22 am | Permalink

      It also requires electricity generating and distribution capacity too.

    • Edward2
      Posted February 6, 2020 at 7:45 am | Permalink

      It will be interesting to see what plans there are to quadruple current electricity capacity.
      Also. we will need to install 400 public charging points a week starting now.

      Every road will need digging up to install bigger cabling to take the huge extra demand and the surge when homeowners switch on their home car chargers at about the same time will be huge and could easily cause power cuts.

    • Fedupsoutherner
      Posted February 6, 2020 at 8:36 am | Permalink

      And when the lithium and other minerals run out for batteries, what then?

    • Ian Kaye
      Posted February 6, 2020 at 2:26 pm | Permalink

      Correct.Induction charging is the answer too

  21. Anonymous
    Posted February 5, 2020 at 10:43 pm | Permalink

    They’re blaming it on Brexit.

    They’ll blame the coming Thunberg depression on Brexit too … and Andy will blame me for blaming a little girl (human shield.)

  22. agricola
    Posted February 6, 2020 at 6:29 am | Permalink

    A further thought has struck me in this precipitate drive for electrification. If the solutions for individuals are inadequate, those for heavy goods transport are none existent. The only immediate solution is to develope a rail freight system the like of which we have never seen on the base of a railway system that does not currently work for passengers.

    One key point I would make is that anyone who works to remove the freedom of the individual to drive when and where he likes is taking a bigger risk than did Corbyn at our last election.

    • ian terry
      Posted February 6, 2020 at 9:58 am | Permalink

      agricola

      +1

  23. Newmania
    Posted February 6, 2020 at 7:59 am | Permalink

    80% drop in investment in motor since 2016 . Nothing to do with Brexit , just a coincidence.. it just makes you despair.It will gives me no pleasure to see Nissan follow Honda and good jobs that support families thrown away by this foolish Nationalist project
    At least I can say I did all I could to help them unlike others ..still ‘Sir’ sounds rather nice doesn’t it.

    • Edward2
      Posted February 6, 2020 at 2:56 pm | Permalink

      The industry is unsure what to invest in because politicians keep changing their minds on vehicle policy every few months.
      First it was diesels, then hybrids, then back to petrol and yesterday it is to be a ban on all except electric cars
      PS
      The FT says 1.7 billion in 2016 to 1.1 billion last year so not 80% down.

  24. Old Albion
    Posted February 6, 2020 at 8:02 am | Permalink

    And I’ve just read more punitive ’emissions’ based VED is on the way in April.

  25. Dan
    Posted February 6, 2020 at 10:36 am | Permalink

    A ready made solution that is already in use globally is Compressed Natural Gas (CNG) vehicles. There is already a nationwide network of filling stations, it is relatively simple to add them onto existing filling stations. Emissions are a lot less that petrol and diesel, it costs less, filling up is just as quick, we have plenty of it under our feet and it can be used whilst we establish a hydrogen based infrastructure network.

  26. John Brown
    Posted February 6, 2020 at 10:40 am | Permalink

    The reason for the current hysteria that everything possible must be done immediately to cut carbon emissions is coming from those who benefit financially from expensive and wasteful spending on useless technology and those who are worried that if nothing is done and the planet does not go into climate meltdown they will be shown up to be false prophets of doom.

  27. Diane
    Posted February 6, 2020 at 11:19 am | Permalink

    Just musings: Anyone been anywhere near the Dartford Tunnel on slightly busier days than usual or indeed on days when there are jams perhaps in front or behind….or further on e.g.M1/M6. All those huge lorries / trailers / vans trundling their way up & down the country delivering all the stuff we need or want or just might fancy. Will we see huge reductions of this sort of traffic & pollution in the future through our & other nations’ actions ? Do the various wars which are being fought & the destructive agents used in those conflicts have any bearing on world pollution or climate, never read anything from that perspective. We are told we all need to act now, immediately but I fear that some very poor & uninformed decisions are being made in all quarters and too quickly to be sensible.

  28. glen cullen
    Posted February 6, 2020 at 5:41 pm | Permalink

    And damage to the train manufacturing industry

    Only one out of five bidders on HS2 train has a manufacturing base in UK

    Jobs for the UK…I think not

  29. Iain Gill
    Posted February 6, 2020 at 9:41 pm | Permalink

    Funnily enough I wanted to buy a new diesel, but the car maker has stopped selling them in the model I want in the last 6 months or so. So its a feedback loop, politicians fighten the car makers, car makers withdraw diesel models, public forced to buy petrol.

    So sure diesel sales have fallen off a cliff face, but I am far from convinced that is due to customer choice. I am sure many cases will be like mine, forced into a petrol when the same model over recent years has been bought with a diesel engine.

    Funnily enough my last diesel car was so clean the government awarded it zero rating for car tax, all of 3 years ago. But now its modern equivalents which are even cleaner have been pushed out of the market.

    Lots of people making a lot of money out of this manipulation. I am sure this kind of nonsense was plotted at Davos.

    Come on just because the Labour party is so crap, no need for the Conservatives to stumble around making chaotic decisions based on quack science.

    • glen cullen
      Posted February 7, 2020 at 9:54 am | Permalink

      agree

  30. Lindsay McDougall
    Posted February 8, 2020 at 2:43 am | Permalink

    The latest BoE debt statistics that I could find on the internet were:
    – Car loans £58 bn
    – Credit cards £67bn
    – Mortgages £1,3 trillion

    So why are car loans the whipping boy?

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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