The automotive industry in Britain is pushing for the UK Government to take swift action in converting electric vehicle (EV) skeptics to embrace the benefits of EVs. The Society of Motor Manufacturers and Traders (SMMT) is advocating for the implementation of purchase incentives to stimulate greater demand for EVs.
According to the SMMT, introducing such measures could potentially boost the market by an additional 15% on top of current projections. This would result in a total of two million new EVs on the road by 2028, leading to increased business opportunities for chargepoints, insurance, maintenance, and other related sectors, while also significantly reducing road transport emissions.
The SMMT’s new modeling indicates that under current market conditions, approximately 1.782 million new EVs are expected to be registered between 2025 and 2027. By halving VAT on new EV purchases, the SMMT believes that demand could be further increased by 15%, resulting in an additional 267,000 new EVs on the road. This would bring the total registrations to 2.05 million electric vehicles, creating a ripple effect that would drive growth in various sectors and contribute to a cleaner environment.
While reducing VAT on EV purchases would entail a temporary cost to the Treasury, the SMMT highlights that the UK Government has benefitted from a GBP2.5 billion VAT windfall over the past five years due to the increased uptake of EVs. By combining purchase incentives with flexible regulations and mandated chargepoint rollout, the UK could witness a significant reduction in CO2 emissions by six million tonnes annually, equivalent to cutting aviation emissions by almost a sixth.
The SMMT emphasizes that manufacturer investments have led to a wide array of EV options, with over 1.3 million EVs already on UK roads. However, natural demand must be further stimulated to meet Zero Emission Vehicle (ZEV) Mandate targets. The survey conducted by the SMMT reveals that while 23.1% of potential car buyers plan to switch to an EV by 2028, this falls short of the Government’s target of a 28% EV market share this year.
By implementing purchase incentives, expanding chargepoint infrastructure, and reducing charging costs through a VAT cut, the SMMT believes that nearly 40% of consumers could be encouraged to transition to EVs. This would not only lead to significant carbon savings but also stimulate growth in the new car market and benefit various sectors.
In conclusion, Mike Hawes, SMMT Chief Executive, emphasizes the importance of government support in converting electric skeptics and driving the adoption of EVs. He envisions a future where more than two million new EVs could be on the road by 2028, leading to economic growth and environmental benefits across the country. The automotive industry is ready to lead the charge towards a greener future, and with the right incentives in place, the transition to electric vehicles could be accelerated.
