No EV incentives in 2024 budget, but fuel duty’s frozen again

There’ll be no increases in fuel duty for the next 12 months, as the chancellor’s budget today ‘baked in’ the 5p petrol and diesel duty cut that was due to expire this month. There’s no other relief specifically targeting drivers though, and Jeremy Hunt’s budget statement was notable for ignoring industry calls to support private EV sales through VAT and Vehicle Excise Duty (road tax) cuts.

The budget fuel statement will come as a big relief to hard-pressed drivers struggling with excessive fuel prices, but won’t have them rejoicing.

"It would be crass not to be thankful to Jeremy Hunt and the six previous Tory Chancellors for keeping fuel duty frozen, for the 14th year in succession," said Howard Cox, founder of campaign group FairFuelUK. "But when 9 out of 10 drivers call for a significant cut in this regressive levy and nearly 40 MPs want it lowered too, it shows that he is too scared and economically ignorant of the growth potential in cutting consumer taxes."

Simon Williams, head of policy at motoring organisation the RAC, said the looming election meant it would have been a huge surprise if the Chancellor tampered with the “political hot potato” of fuel duty. “But, while it’s good news that fuel duty has been kept low, it’s unlikely drivers will be breathing a collective sigh of relief as we don’t believe they’ve fully benefited from the cut that was introduced just two years ago due to retailers upping margins to cover their ‘increased costs’,” Williams added. “This has meant fuel prices have been higher than they would otherwise have been.

Last week the Society of Manufacturers and Traders set out a three-pronged package of reforms it wanted to hear from the chancellor in his budget today. The SMMT called on Hunt to cut VAT on private electric car purchases by half saving the average buyer £4,000, to exempt EVs from the five-year ‘expensive car’ supplement on road tax costing £1,950, and to reduce the 20 per cent VAT on public EV charging to the same 5 per cent VAT paid on electricity used for charging at home.

The Chancellor ignored the pleas, leaving the problematic high cost of electric cars firmly in the lap of the manufacturers.

“It’s hugely disappointing that the Chancellor has failed to reinstate financial incentives for electric vehicle buyers in today’s budget,” says FIAT UK’s managing director Damien Dally. “The numbers don’t lie, private sales account for fewer than one in five electric car registrations in 2024 – and the overall market share is way below the 22% mandated by the government as part of the ZEV Mandate. 

“The demand for electric vehicles is waning and we are sleepwalking into an electric vehicle crisis. The government is also potentially putting its Net Zero target at risk. 

“Without any government financial incentive there’s no reason for the consumer to make the switch.”

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