The government will not equalise the VAT differential between public and domestic charging and it will not bring back plug-in grants for drivers.
The news came in the government’s response to the House of Lords Environment and Climate Change Committee report’s recommendations. It disagreed with reducing VAT on public charging from 20% to 5% to bring it in line with domestic electricity. It also said plug-in grants had been in place for over a decade to help reduce the up-front purchase price of new EVs. It said it is now targeting its incentives where they have the “most impact and deliver the greatest value for money”. Plug-in grants will continue until at least financial year 2024/25 for motorcycles vans, taxis, trucks and wheelchair accessible vehicles.
Other responses to the Lords’ report included:
• The government partially agreed with the recommendation that it confirm its revised deadline for meeting its motorway service area chargepoint target. The government said it is currently considering the need to identify a minimum sufficiency level for the future rollout of chargepoint provision at MSAs, but recognises demand is not consistent at all sites and some sites face distinct barriers to chargepoint provision. It said it was also working in tandem with industry stakeholders to resolve challenges to chargepoint rollout, including targeted support for rollout at MSAs.
• The government partially agreed with the recommendation that funds from the Rapid Charging Fund (RCF) be distributed according to need across the strategic road network. The Lords’ report said there was a risk that motorway services areas would be prioritised over the wider road network, which includes important A-roads, especially as the government is behind on its motorway service area target. The government said it will review evidence from the public consultation, which closed on February 14, to consider whether A -road sites will be eligible for the main RCF fund. A decision on this will be made public, along with other criteria, when the main RCF opens for applications.
• The government disagreed with the recommendation that totem signs on motorways for service stations be mandated to include EV charging. It said the ability to provide information about EV chargepoints on signing for MSAs already exists. The design of traffic signs for MSAs is regulated through the Traffic Signs Regulations and General Directions 2016. This allows the EV charging symbol to be included on these signs. The strategic road network of motorways and trunk roads is run by National Highways on behalf of the Secretary of State, and they determine policy on the inclusion of agreed symbols on MSA signs.
• The government ‘partially agreed’ to the recommendation that it must accelerate the rollout of the UK’s EV charging infrastructure. It countered that since March 2023, there has been a 47% increase in the number of public chargepoints in the UK, totalling just under 57,000 in March 2024.
• The government ‘noted’ the recommendation regarding public chargepoints and specifically that it introduce new powers urgently and use them to direct local authorities in areas where there are fewer than 50 public chargepoints per 100,000 people to prepare EV strategies. The Lords’ report said this would help to ensure a more evenly distributed chargepoint rollout. The government said it has already committed to working with Local Transport Authorities to update their Local Transport Plans to include EV charging strategies. And since the original consultation, many local authorities have taken positive steps towards planning for this infrastructure provision.
• The government agreed with the recommendation that it publish its plans as early as possible to support infrastructure rollout – and streamline the various consents required for planning and permitting. It said that as part of the Plan for Drivers, it has published a consultation on plans that would allow EV chargepoint operators access to permits via Street Manager, the DfT’s digital service for planning and managing works.
The consultation closes this month and the government intends to publish its response to the consultation later in 2024.
• The government disagreed with the recommendation that it ‘define and label’ grid upgrades to support chargepoint installations as ‘Nationally Critical Infrastructure’ projects and prioritise the grid upgrades needed to deliver EV infrastructure.
The government said it has no powers in legislation to prioritise connections for specific sectors, such as transport, over others, and network companies have licence conditions set by Ofgem which prohibit discrimination between connection applicants. However, it added that measures in its Electricity Networks Package will speed up the delivery of electricity network infrastructure to facilitate timely connections for all sectors.
• The government agreed with the recommendation that it review the planning regulations for the upgrade of power lines and simplify the process, where possible, to speed up upgrades, particularly in rural communities while still ensuring proper protection of the environment and heritage. It said it is reviewing the land rights processes for network infrastructure.
• The government ‘partially agreed’ to the recommendation that it accelerate its collaboration with industry to develop a ‘battery health standard’ that is objective and reliable. It said that through the United Nations Economic Commission for Europe (UNECE), it has worked with industry and other governments to develop a Global Technical Regulation on EV batteries (GTR 22) that would set minimum durability and lifespan standards. It would also make reliable and comparable battery health information accessible to a vehicle’s owner. In January, the Zero Emission Vehicle Mandate regulations came into force, which obligate manufacturers to provide minimum warranties for EV batteries, in line with the GTR 22 durability standards. The government is currently analysing options for the implementation of the GTR 22 battery regulations in the UK.
• The government ‘noted’ the recommendation that it should review the schemes that other countries, including Scotland and the Netherlands, have implemented to incentivise the purchase of second-hand EVs, evaluate their outcomes and explore whether similar schemes could be offered in England and Wales. It countered that ‘industry intelligence’ suggests that some EVs on the used market are now similar in price to their petrol and diesel equivalents. The number of used EVs continues to rapidly increase. Data from the SMMT shows that, in 2023, used EV sales increased by 90.9%, increasing the pool of available vehicles.
