The motor industry is intensifying its call for a reduction in VAT on electric vehicles and public charging infrastructure. This is in response to challenges in meeting government sales targets for zero-emission vehicles.
Despite an impressive number of registrations in recent months, electric vehicles (EVs) are still falling short of desired market share. The Society of Motor Manufacturers and Traders (SMMT) is urging the UK government to make crucial policy adjustments.
The electric vehicle market is experiencing significant obstacles in achieving the UK’s zero-emission sales targets. Battery electric vehicles (BEVs) represented just 17.8% of the market this year, a figure anticipated to increase to 18.5% by year’s end. However, this projection still falls short of the stringent government target of 22% for new car sales. Manufacturers find themselves in a challenging position.
Considerable discounts, estimated to cost over £2 billion in 2023, have been provided by manufacturers to entice buyers. Yet, petrol and diesel vehicles still dominated with a 56.4% share in September. The VAT cut is thus seen as a strategic move to shift consumer preferences towards electric vehicles.
An additional recommendation includes postponing the introduction of road taxes for EVs, slated for implementation next year, and extending the subsidy for commercial electric vans beyond March. These measures are designed to support both private consumers and businesses in transitioning to electric vehicles.
In contrast, the UK has largely phased out grants for EV purchases, although business buyers can still leverage tax incentives for EV company cars. Industry leaders caution that without renewed government intervention, meeting zero-emission targets remains a daunting task.
There are concerns regarding the financial implications for the public purse, though proponents argue the long-term benefits—like reduced carbon emissions and enhanced global competitiveness—outweigh immediate costs. Further analysis highlights the strategic importance of maintaining momentum in the EV market.
The proposed measures reflect a comprehensive approach to tackling both immediate market barriers and long-term sustainability goals. As the government considers these recommendations, the EV market’s trajectory remains closely tied to policy decisions made in the near future.
In summary, the motor industry’s propositions underscore crucial policy adjustments needed to reinvigorate the EV market. A reduced VAT on electric vehicles and charging points could be pivotal in reaching zero-emission sales targets.
Moving forward, the government’s response to these calls will significantly shape the EV market’s landscape, affecting consumer behaviour and industry dynamics alike.
