Sir Keir Starmer promised “bold changes” as he announced he will relax rules around electric vehicles after carmakers were hit by Donald Trump’s tariffs.
The prime minister said “global trade is being transformed” after the US president‘s 25% levy on imported cars, and 10% tariff on other products, came into force.
Jaguar Land Rover has said the firm will “pause” shipments to the US as they look to “address the new trading terms”.
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Labour made a manifesto pledge to restore a 2030 ban on the sale of new petrol and diesel cars after it had been rolled back to 2035 by Rishi Sunak’s Conservative government.
Sir Keir will officially confirm the ban in an announcement on Monday but regulations around manufacturing targets on electric cars and vans will be altered, to help firms in the transition.
Luxury supercar firms such as Aston Martin and McLaren will still be allowed to keep producing petrol cars beyond the 2030 date, because they only manufacture a small number of vehicles per year.
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Petrol and diesel vans will also be allowed to be sold until 2035, along with hybrids and plug-in hybrid cars.
The government is also going to make it easier for manufacturers who do not comply with the government’s Zero Emission Vehicle (ZEV) mandate, which sets sales targets, to avoid fines, and the levies will be reduced.
Sir Keir said: “I am determined to back British brilliance.
“Now more than ever UK businesses and working people need a government that steps up, not stands aside.
“That means action, not words.”
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Officials have said that support for the car industry will continue to be kept under review as the full impact of the tariffs announced last week becomes clear.
Transport Secretary Heidi Alexander said the industry deserves “clarity” in the economic context.
She said: “Our ambitious package of strengthening reforms will protect and create jobs, making the UK a global automotive leader in the switch to EVs, all the while meeting our core manifesto commitment to phase out petrol and diesel vehicles by 2030.”
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Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) said the government had listened to the industry and “recognised the intense pressure manufacturers are under”.
“We await full details of the regulatory amendments but, given the potentially severe headwinds facing manufacturers following the introduction of US tariffs, greater action will almost certainly be needed to safeguard our industry’s competitiveness,” he said.
“UK-US negotiations must continue at pace, while the long-awaited industrial and trade strategies should prioritise automotive and be delivered at speed.”
Colin Walker, a transport analyst at the Energy and Climate Intelligence Unit, said the ZEV mandate is a “global success story” in driving a surge in sales of electric vehicles.
He added: “But, in weakening the mandate elsewhere by extending flexibilities and allowing the sale of standard hybrids between 2030 and 2035, the government risks reducing the competition it has stimulated between manufacturers, meaning prices for families seeking an EV might not fall as fast, and sales could slow.”
