SMMT calls for 'fairer incentives' to encourage drivers to make switch to EV

SMMT CEO Mike Hawes warns the EV revolution has so far been for ‘fleets, not families’ and has called on the government to improve its support for private buyers

The government is facing fresh calls from the auto industry to introduce more generous incentives to drive consumer uptake of electric vehicles (EVs), in the wake of new statistics that underscore how fleet and corporate buyers are almost twice as likely to switch to electric models than private customers.

Industry group SMMT has today called on the government to scrap VAT from the purchase price of EVs and maintain its zero emission vehicle subsidy grant scheme, the Plug-in Car Grant, beyond next year, when it is currently scheduled to end.

The call for enhanced incentives, which comes in the wake of Ministers’ decision to cut the maximum payment available to motorists through the Plug-in Car Grant scheme, is backed by an analysis that highlights how just 4.6 per cent of car registrations in the retail sector in 2020 were electric vehicles (EVs), compared to 8.7 per cent for fleets and businesses.

The SMMT argued this disconnect could be remedied if the government enhanced its support for the retail sector and significantly ramped up efforts to deliver a thriving charge point network across the UK, arguing that businesses and company car drivers currently benefit from “stronger and longer-lasting incentives” than consumers. Confidence in EVs across the private auto market remains relatively low because of concerns over affordability, charge point availability and infrastructure reliability, it warned.

SMMT chief executive Mike Hawes argued the “bumper uptake” of EVs over the past year had been “an electric revolution primarily for fleets, not families”.

“To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, government and other stakeholders must put ordinary drivers at the heart of policy and planning,” he said. “We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location.”

The study predicts the government could increase uptake of EVs by almost two-thirds by 2026 compared to current predictions if it cut VAT from the purchase price of EVs and maintained its zero emission vehicle subsidy programme beyond 2022/23 financial year, when it is currently set to end.

The SMMT analysis warns that while UK plug-in registrations were slightly above the EU-wide average of 10.5 per cent in 2020, uptake of EVs in Britain is lower than Germany, France, and the Netherlands, where incentive packages are more generous and are slated to stay in place for longer, the SMMT said. The £2,500 grant offered through the UK’s Plug In Car Grant programme is significantly lower than the €9,000 grant offered towards a new battery EV (BEV) in Germany or the purchase cost savings enjoyed in the Netherlands, where there is no VAT on BEV purchases, it said.

The report also argues the rate of charger installations needs to rapidly accelerate, given that one in three households in the UK do not have dedicated off-street parking.

Responding to the report, a spokesperson from the Department for Transport pointed to the government’s commitment to invest up to £2.8bn in the electric vehicle transition through grants for vehicles and support for the installation of chargepoints. “Last year, SMMT stats revealed more than one in 10 cars sold in the UK had a plug,” they said. As we build back greener and accelerate towards net zero emissions by 2050, this shows that the electric vehicle revolution is already happening right here in the UK.”

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