The BBC understands that rules on the sale of electric vehicles (EVs) could change as part of the government’s “fast track” consultation.
Carmakers with factories in the UK are pushing the government to change the rules, which they say set sales targets too high, because demand for EVs is not strong enough.
Business Secretary Jonathan Reynolds is expected to announce the consultation at the annual dinner of the Society of Motor Manufacturers and Traders on Tuesday.
Under the current mandate, a percentage of the cars that firms sell must qualify as zero-emissions.
EVs should make up 22% of the firm’s car sales and 10% of its van sales this year. For every car sold that falls outside the mandate, they must pay a £15,000 fine.
The system has flexibilities, allowing manufacturers to buy “credits” from those who can’t meet targets.
In practice, that means buying credits from companies like Tesla or Chinese firm BYD, which make exclusively electric models.
Manufacturers say demand for electric cars has not been as high as expected after the rules were enacted.
As a result, to avoid fines, they say they are having to heavily discount new vehicles, or subsidize rivals that make only electric cars, none of which are in the UK. There is no manufacturing base.
Sales of electric cars are on the rise. In October, they built about one out of every four cars registered. However, industry sources insist that this is largely at an unsustainable discount.
Reynolds will try to address those concerns with his announcement later Tuesday, as first reported by Politico.
At a meeting last week with Reynolds and Transport Secretary Louise Haguecar firms called for more flexibility in regulations.
Nissan, which makes EVs at its plant in Sunderland, has said the rules are “damaging the business case for making cars in the UK, and the viability of thousands of jobs and billions of pounds worth of investment”.
Last week, his Rival Ford announced it would cut 800 jobs in the UK over the next three years.. This is partly due to weak demand for EVs, he said.
The BBC understands that, while the government remains committed to meeting Labour’s manifesto target of ending the sale of new petrol and diesel cars by 2030, it is open to considering changes to the mandate.
A number of options have been proposed, including adding flexibility by allowing the transfer of sales credits between cars and vans, giving credits for British-made EVs sold overseas, or encouraging private buyers to opt for EVs. New incentives for giving are included.
In its manifesto, Labor insisted it would bring forward a target date of 2030 to end the sale of new petrol and diesel cars. It is understood that the target is still being seen as non-negotiable, and the annual quota will not be changed.
While the government is open to changing the mandate in other ways, it wants the industry to reach broad agreement on what those changes should be.
Hai said earlier this month that the government would look for “flexibility” but insisted that “the mandate will not be weakened”.