Toyota has warned it could scale back sales in Britain because of "unrealistic" electric car targets .
In an unusually blunt intervention, executives from the Japanese automotive giant told The Telegraph the zero-emission vehicle (ZEV) mandate was "not sustainable" and should be changed to reflect "real customer demand".
Without change, they said, Toyota would have to look at "significant actions", such as reducing the number of cars it plans to sell in the UK.
They also refused to guarantee the future of the manufacturer's plant in Burnaston, Derbyshire – where the Corolla hatchbac k is currently produced – as energy and labour costs rise and amid uncertainty about regulations.
Toyota's criticisms of the ZEV mandate, which is being reviewed by ministers, follow similar complaints from Vauxhall owner Stellantis, Renault and Nissan, all of which also operate UK plants.
Separately on Friday, the boss of Renault also backed calls for a reset and called on Britain to align itself with the EU on both net zero targets and tariffs on Chinese cars.
Under the ZEV mandate, manufacturers must sell a rising proportion of electric vehicles each year or face penalties.
However, Matt Harrison, the chief corporate officer of Toyota Motor Europe, said the sales targets were too aggressive and must be cut.
In an interview with The Telegraph, Mr Harrison called for the ZEV mandate's 2030 target to be cut from 80pc to 50pc and for the 2035 ban on combustion engine cars to be ditched.
Asked how Toyota would respond otherwise, he said: "You can cope with that for a period of time, but it's not sustainable over a longer term.
"So the big question is: are you going to get regulatory flexibility?
"If that's going to happen in the short term, then of course you can cope. If it isn't, then you have to look at more significant actions.
"That might mean rethinking what sort of volume [of cars you sell]. Certainly, nobody's interested in selling cars at a loss for a considerable period of time – I mean, that's not logical."
He added the current mandate was encouraging "disruptive behaviour in the market", with Western manufacturers resorting to buying emissions credits from their Chinese rivals, heavily discounting cars and funnelling sales towards the Motability scheme, which provides cars to those on disability benefits.
'Made in Europe' worries
In comments that will ring further alarm bells for the Government, Yoshihiro Nakata, Toyota's Europe boss, warned that the company's factories, including the car plant in Burnaston and an engine plant in Deeside, Wales, faced mounting problems with competitiveness.
He said: "One [problem] is that energy costs are higher than in other countries, or labour costs are relatively higher, and also the supply chain is being gradually deteriorated.
"The actual skill level [of workers] is very good. But some of these areas, we would like to discuss with the UK Government."
Both Mr Nakata and Mr Harrison stopped short of suggesting Toyota's plants in the UK are at risk. But with investment decisions coming up soon on whether to build new vehicles in Britain, there are doubts about their futures.
Ministers launched a review of the ZEV mandate after heavy pressure from industry. The Government was previously considering cutting the 2030 target to 50pc, but is now said to be considering 60pc. At the same time, the target for 2035 will be left at 100pc.
Mr Harrison said: "The lack of addressing 2035 is not ideal. Let's say 50pc is accepted for 2030, but then 100pc is kept in 2035. We just shove the problem to 2035.
"And if we're trying to make an investment decision ... we don't really have as much clarity as we'd like."
Toyota has separately expressed grave concerns about the EU's "Made in Europe" regime , which will seek to funnel subsidies and tax breaks towards cars made within the bloc.
The policy is designed to tackle the threat from Chinese cars, which Brussels says are unfairly supported by Beijing.
But friendly countries, including the UK, Japan and Turkey, are set to be excluded – with London engaged in a flurry of diplomacy to ensure Britain's car industry qualifies. Around 80pc of cars made in Burnaston are sold across the Channel.
A deal struck by France and Germany this week suggested Britain will be allowed to join Made in Europe, but only if it agrees to align with the EU by imposing tariffs on Chinese cars. The agreement also set out plans for scaled-back electric car targets in the bloc.
François Provost, the chief executive of Renault, said on Friday that Britain should also align itself with Brussels on electric vehicle targets.
He said: "The two policies should be consistent. CO2 policy. Deal with China. Regulation.
"If the UK decides it wants to join [Made in Europe], I think as a consequence, the mandatory condition is a deal with China, some adjustment of the ZEV mandate. It is common sense."
