‘Better electric car incentives are needed to meet sales targets’

A few weeks ago I asked you what it would take to make you buy an EV and it’s fair to say that work needs to be done to get more people interested.

That’s also clear from the latest new-car registration figures. EV sales are up, but their share of the car market is static year on year, with businesses being the main buyers, thanks to financial incentives. Private buyers aren’t as interested.

You told us that price is one of the biggest issues, alongside the charging infrastructure, insurance and range. And as we reported only last week, we’re already seeing the car makers selling EVs at a loss to meet the targets that the Government has set for EV sales in 2024.

So what should the Government do? Currently the incentives focus on generous personal tax benefits for electric company-car users, plus tax benefits for the companies themselves and plug-in grants for businesses buying electric vans.

The car industry has a plan: halve VAT to 10 per cent on EVs for three years. “For demand to meet expectations, we need incentives,” Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) told me. “Investment is needed for private consumers, not just businesses. A VAT reduction on EVs could potentially put over a quarter of a million extra EVs onto the roads.”

According to the SMMT, halving VAT would give buyers an estimated additional £7.7billion in BEV buying power to the end of 2026. And an incentive would bring us into line with the rest of Europe. “The UK is the only major European market with no consumer EV incentive,” Hawes said, “But it’s the only market with mandated minimum targets for new ZEV registrations.”

A VAT cut would help, for sure. But so would mandating more charging points around the whole country and realistic insurance costs. Joined-up thinking is what we need.

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