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The UK car industry has called for tax incentives to help motorists switch to electric vehicles to offset weak demand for battery models from private buyers.
“Our electric car market is moving out of the early adoption phase. To get to the mass market, we need something to motivate consumers,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, which represents the UK car industry.
He told an SMMT conference on Monday that it would be harder for the UK to meet its net zero emissions target if mainstream buyers could not be persuaded to switch to battery-powered models.
The British government plans to phase out the sale of new petrol and diesel cars by 2030, and some hybrid cars will be allowed to be sold until 2035. Electric vehicles account for 16% of new car sales in the UK, with more than 1 million cars on the road.
But corporate sales account for the vast majority, with just a quarter going to private buyers – a level that is falling.
Battery-powered cars bought through the company car scheme or salary sacrifice receive generous tax benefits, while motorists buying vehicles privately from dealers have no direct purchase benefits since the so-called “plug-in car grant” was scrapped last year.
Alex Smith, who runs Volkswagen in the UK, which accounts for about a fifth of UK car sales, said the purchasing power of mainstream non-commercial buyers had been “stagnant”. He said the phasing out of incentives had hurt demand from private buyers, which had now “flattened”.
“Where incentives are really successful is in getting the message out that electrification is the ideal direction for mobility,” he said. “If we’re going to re-accelerate this transition, we need some level of lift.”
The SMMT is calling on ministers to reduce VAT on electric vehicles and scrap plans to increase excise duty on electric vehicles from 2025. The government has been contacted for comment.
The trade body also wants the government to set mandatory targets for the installation of public charging points. The lack of a comprehensive charging network has long been cited as one of the biggest obstacles for drivers making the switch to fully electric vehicles.
Richard Bruce, head of transport decarbonisation at the Department for Transport, told the SMMT conference that setting an EV charging target was “very difficult” because “any target you come up with is going to be wrong”.
“It’s amazing how much effort, effort and money has gone into charging infrastructure,” he said. . . There is no government support” but the industry “cannot pretend that today’s offer is perfect”.
Smith said mass-market buyers still had significant questions about the availability of charging infrastructure, which is mainly concentrated in London and the south-east.
Smith added that charging at home is “inherently foreign” to most people, while “the next group of people who are likely to adopt electric vehicles assume that electric vehicles are inherently expensive.”
Smith added that carmakers needed to do more to convince consumers of the running cost advantages of electric vehicles, which are still more expensive to buy but cheaper to run and cheaper to repair when charged at home.
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