With his Conservative Party's poll ratings flagging ahead of an election expected next year, Sunak outlined a softening of government policies aimed at achieving net zero emissions by 2050.
The cost of the government's policies have been provoking growing disquiet in recent months as a cost of living crisis has continued to squeeze voters.
The roll back included a postponement of the ban on the sale of new petrol and diesel cars from 2030 to 2035.
Energy efficiency targets for rental properties would also be scaled back as would a requirement for homeowners to replace gas boilers with heat pumps.
But businesses reacted with anger denouncing the uncertainty the decision to backtrack would cause.
"Our business needs three things from the UK government: ambition, commitment and consistency," said Ford UK chief Lisa Brankin.
A relaxation of the 2030 target would "undermine all three", she added.
The sector is already facing rising costs due to the country's cost of living crisis, Brexit custom duties and infrastructure for the production of electric vehicles which is still in its infancy.
The British automotive sector lobby, the SMMT, denounced "confusion and uncertainty".
- 'Clear message' needed -
The SMMT said that to make net zero a reality "consumers must want to make the switch" to electric vehicles.
This "requires from government a clear, consistent message, attractive incentives and charging infrastructure that gives confidence rather than anxiety", said SMMT chief executive Mike Hawes.
He said the automotive sector was spending billions of pounds on new electric vehicles.
The government has been been striving for years to attract investment in electric battery factories, crucial for the future of the sector and the creation of UK manufacturing "hubs".
As a result, the British government is largely subsidising Tata's electric battery factory in the UK, a 4 billion pounds ($4.9 billion) project unveiled to great fanfare this summer.
The amount injected by Downing Street was not revealed, but according to a report in the Financial Times Tata had asked for half a billion pounds.
A few days ago, Germany's BMW announced 600 million pounds for the electrification of Minis in the UK, with substantial investment from the British state.
Home Secretary Interior Minister Suella Braverman earlier Wednesday said the government would not "save the planet by bankrupting the British people".
In an apparent reaction to her comments Chris Norbury, chief executive of energy company E.ON, called the government's change of approach a "mis-step on many levels".
And he hit out at the "false argument" that green policies can only come at a cost, arguing they deliver affordable energy while boosting jobs.
"From a business perspective, companies wanting to invest in the UK need long-term certainty to create the jobs and economic prosperity the country needs," he added.
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