Britain’s car industry is in crisis due to a lack of demand for electric cars, the boss of Ford’s UK arm has warned.

Lisa Brankin, the chairman and managing director of Ford UK, called for the Government to urgently introduce ‘incentives’ such as tax breaks to convince drivers to switch away from petrol and diesel.

She said Ford has invested ‘significantly’ in the production and development of EVs, with ‘well over’ £350million invested around electrification in the UK, adding: ‘So we kind of need to make it work.’

Asked whether she is happy for the Government to stick to the targets around EVs and ending production of diesel and petrol cars as long as they help persuade customers to buy electric vehicles, Ms Brankin told BBC Radio 4’s Today: ‘Yes, I think so.’

But she added: ‘As an industry we have repeatedly said that we support the Government’s trajectory and we support the ambition that the Government has set out, it’s just that there isn’t customer demand.’

It comes as Sir Keir Starmer was challenged at Prime Minister’s Questions about potential job losses announced by Vauxhall owner Stellantis, which has said it will close its van-making plant in Luton.

Conservative Party leader Kemi Badenoch suggested Sir Keir ‘doesn’t seem to care’  about the job losses and questioned his decision to continue with the previous Tory government’s pledge to phase out petrol cars.

She added in the Commons: ‘Perhaps he can show more concern for the 1,100 people who found out yesterday that they could lose their jobs at Vauxhall’s plant in Luton.

‘So while he flies around making unilateral commitments, back home the real world effects are businesses closing in Bedfordshire and Basildon.

‘Does the Prime Minister stand by his promise to ban the sale of petrol cars by 2030 even if more jobs will be lost?’

Sir Keir replied: ‘The question of the position of jobs in Luton is a very serious one and families and workers will be very worried and we’re obviously engaging with them.

‘I would remind the leader of the Opposition that the EV (electric vehicle) mandates that are an issue in this particular case were actually introduced by the last government.

‘I would also remind her that she was the business secretary that introduced them. We’re getting on with supporting those communities, she’s shouting from the sidelines.’

Mrs Badenoch countered: ‘He clearly didn’t read his briefing about the EV mandate. The fact is we changed the date and made it easier for people. Everything he has done is attack people.’

Chancellor Rachel Reeves said the Government would ensure ‘proper support’ for the car industry as it phases out sales of new petrol and diesel vehicles.

‘We are committed to the 2030 target for phasing out the purchase of new petrol and diesel cars, but it is really important within that to make sure that we get the balance right and have proper support for the automotive sector, for the car industry in Britain,’ Reeves told broadcasters.

‘We have just launched a consultation to look at the plans that we inherited from the previous government which would have meant fines for businesses that didn’t sell a proportion of electric vehicles, because we want to keep investment, we want to keep jobs in Britain.’

The Society of Motor Manufacturers and Traders has warned the pace of the transition could hit carmakers as demand for zero-emission vehicles ‘failed to meet ambition.’

Under the zero-emission vehicles (Zev) mandate, at least 22 per cent of new cars sold by each manufacturer in the UK this year must be zero-emission, with the threshold rising each year.

The mandate as it stands sets out a target to reach 80 per cent by 2030, but the Government has committed to bringing the ban on the sale of new petrol and diesel cars and vans forward from 2035 to 2030, reversing a change introduced by Rishi Sunak’s government last year.

Today, Business Secretary Jonathan Reynolds signalled an overhaul of the government’s EV targets after Vauxhall announced plans to close its factory in Luton.

Stellantis, which also owns Citroen, Peugeot and Fiat, said it would combine production at its other plant in Ellesmere Port.

The firm said Labour’s eco policy fuelled the decision – which puts around 1,100 jobs at risk.

Passed into law under Rishi Sunak’s Conservative government, the zero-emission vehicle (ZEV) mandate requires manufacturers to increase the share of zero emission cars they sell each year.

Given there are almost no hydrogen fuel cell vehicles sold in Britain today, this primarily means an increase in battery electric car sales.

But car makers say the time limit is arbitrary and have called for longer to work towards the goal of zero-emission vehicles.

They face a fine of £15,000 per non-compliant car and £18,000 per non-compliant van sold outside the goal.

The targets for ZEV car sales are:

As of July, electric vehicle sales made up around 16.8 per cent of all new car sales in the UK in 2024. Labour has hinted it may reinstate a 100 per cent target for 2030.

The government has now launched an urgent review of sales targets designed to accelerate the EV transition, following repeated warnings that they are putting jobs and investment at risk.

The 2030 ban will mean firms cannot sell pure fossil fuel cars, but they will be able to continue selling hybrids until 2035.

SMMT boss Mike Hawes has warned that the sales threshold could cost the industry nearly £6billion this year alone.

Speaking at the trade body’s annual dinner on last night, Mr Hawes told an audience: ‘Jobs are on the line.’

Major industry players, including Ford, Nissan and Stellantis, have been warning for weeks that the rules could have an ‘irreversible impact’ on UK car production.

Earlier this year, Stellantis boss Carlos Tavares warned the future of both Luton – which has been making vehicles for 120 years – and Ellesmere Port were in doubt.

When Labour entered No 10 in July he announced a review of the future of both plants while citing the impact of the EV sales mandate. Car-makers are already being forced to cut jobs because of plummeting sales of EVs to private motorists and after Labour hiked employer National Insurance contributions in its Budget.

Rachel Hopkins, Labour MP for Luton South, said the closure was ‘deeply troubling for our town’, adding: ‘Luton depends on these high-quality manufacturing jobs to drive local growth and support national prosperity.’

And Tories stepped up condemnation of Labour’s approach last night.

Lord Frost warned Labour’s ‘crazy pursuit of net-zero on an accelerated timetable is going to do real damage to the economy and to the living standards of everyone in this country.’

Tory MP Greg Smith added: ‘The Government appears to have discovered there is such a thing as a market – and EVs are proving very unpopular with real consumers.’