Summary
- UK government incentives for electric cars are lacking compared to other European countries
- The government has set targets for zero emission vehicle sales each year, with penalties for car makers that miss them
- Car makers are offering discounts and incentives to customers to transition to electric vehicles
- Industry groups are calling for more balanced VAT on public charging points and incentives for the used car market
- The ban on the sale of new internal combustion-engine cars by 2030 lacks clarity regarding hybrid cars
Article
The UK government’s targets on the sale of electric cars may be missed without the introduction of customer incentives, according to the UK managing director of Polestar, a Swedish car company. The UK has been described as the worst in Europe when it comes to government incentives for customers to switch to electric cars. The introduction of the zero emission vehicle (ZEV) mandate this year sets out the percentage of zero emission cars and vans each car company must sell annually. The government aims for 80% of new cars and 70% of new vans sold in Britain to be zero emissions by 2030, increasing to 100% by 2035. However, current statistics show that only 17.2% of cars sold in the UK this year are battery electric vehicles.
Car makers that fail to meet the targets set by the ZEV mandate will face penalties, with some temporary measures in place to avoid those penalties. Industry groups are calling for more balanced VAT on public charging points compared to charging at home. Polestar, as a 100% electric car company, can sell credits to other car companies, which helps to offset its 50% decrease in sales year-on-year. Polestar has also been offering incentives to customers such as zero percent finance and free home charging points. Other car makers are providing discounts and deals to make electric cars more attractive to consumers.
The UK managing director of Polestar, Matt Galvin, criticized the ZEV mandate for creating an unnatural marketplace that is putting pressure on consumers and the car industry. He believes that customers will transition to electric cars when they are both ready and incentivized to do so. Galvin emphasizes the need for government support and incentives to assist customers with the transition to electric vehicles. The Society of Motor Manufacturers and Traders (SMMT) has called on the government to halve VAT on new electric cars and balance the VAT on public EV charging with home electricity.
Galvin suggests that the government should go further to stimulate interest in EVs, proposing a short period of VAT-free new cars and support for the used car market. He believes that price is a significant barrier for many people looking to switch to electric vehicles, and subsidies for used EVs could help address this issue. Despite Labour’s reinstatement of the 2030 ban on the sale of new internal combustion-engine cars, it is unclear whether hybrid cars will still be permitted after that date. Galvin stresses the need for clarity around the ban to provide certainty for consumers and the automotive industry.
In conclusion, the UK’s government targets for electric car sales may not be met without the introduction of customer incentives. The ZEV mandate sets the percentage of zero emission vehicles that car companies must sell annually, with penalties for those who fail to meet the targets. Industry groups are calling for balanced VAT on public charging points and offering discounts and incentives to consumers to drive the adoption of electric vehicles. Matt Galvin of Polestar emphasizes the need for government support and incentives to assist customers with the transition to electric vehicles, including VAT reductions on new cars and support for the used car market. Clarification on the ban on internal combustion-engine cars and hybrid vehicles after 2030 is also needed to provide certainty for consumers and the automotive industry.
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