Sales of electric cars to private buyers fell by 2% during May, compared with the same month last year, indicating that the next government needs to provide motorists with “meaningful purchase incentives”, warns the SMMT.
It says that while electric vehicle registrations outperformed the market, rising 6.2% year-on-year, compared to 1.7% for the UK new car market, uptake is still driven by the fleet sector.
While it is encouraging that the latest stats show electric cars have claimed a 17.6% market share, says the SMMT, percentages are still below where manufacturers need to be to hit EV targets set out in the government’s Vehicle Emissions Trading Scheme. It demands 22% of new vehicles sold this year are zero emission, by each brand.
With a choice of more than 100 EV models now available, and a “raft of compelling offers”, it says that manufacturers are dedicated to driving change, but that meeting targets will require more support.
Manufacturer discounting cannot be sustained indefinitely as it undermines the ability of companies to invest in next generation technologies, it says. And, it asserts, while certain private buyers can access some of the benefits enjoyed by business buyers through salary sacrifice schemes, providing universal access to incentives would “dramatically increase BEV uptake and accelerate the decarbonisation of road transport”.
The SMMT suggests temporarily halving VAT on new BEV purchases, combined with a cut in the VAT levied on public charging from 20% to 5% – in line with domestic use. Such initiatives would put more than a quarter of a million EVs on the road in the next three years, it maintains.
“As Britain prepares for next month’s general election, the new car market continues to hold steady as large fleets sustain growth, offsetting weakened private retail demand,” said SMMT chief executive Mike Hawes. “Consumers enjoy a plethora of new electric models and some very attractive offers, but manufacturers can’t sustain this scale of support on their own indefinitely. Their success so far should be a signpost for the next government that a faster and fairer transition requires carrots, not just sticks.”
Paul Tomlinson, co-founder of chargepoint provider Cord, said that temporarily cutting or eliminating VAT on new EV purchases would give a “massive immediate boost” to sales.
He added: ”If money’s too tight, a planning law change that introduced a ‘right to install’ for home EV charging could remove one of the largest barriers to private uptake – the patchwork of local regulations that can make charging a headache.
“The switch to EVs in the UK is being driven almost entirely by fleet purchases, who can make use of generous tax incentives. Private purchases of EVs are actually falling. Those fleet cars will eventually make their way to the secondhand market, but we all need to be rowing in the same direction on this.”
