Cut taxes to fuel electric car sales and meet climate targets, says SMMT | Business News

The new government should cut taxes on electric vehicles to revive declining sales and help the industry meet its climate targets, the motor trade body said.

New car sales have fallen across the board over the past six months, with petrol, diesel and electric cars falling 7.6%, but the industry is particularly concerned about the slowing growth in EV sales with strict “zero mandate” regulations about to come into effect.

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Electric vehicles still represent almost 38% of the new car market and market share continues to increase, but the pace of growth has slowed since the previous government imposed a ban on the sale of new internal combustion vehicles. back to 2035.

Sir Keir StarmerThe Israeli government reversed that decision, reimposing the 2030 target, but the Society of Motor Manufacturers and Traders (SMMT) says it should now consider consumer incentives to revive interest.

Requests consumer incentives

The SMMT calls on the government to halve VAT on new battery electric cars for three years, estimating this will increase sales by 250,000 units; exempt EVs from the “expensive vehicle” supplement to vehicle excise duty, which applies to cars costing more than £40,000; and equalize VAT on vehicle charging, between the 5% that consumers pay at home and the 20% charged at charging points on the street.

SMMT chief executive Mike Hawes said incentives must be considered as the industry is struggling to meet the requirement that 22% of all new cars sold this year be electric, rising to 80% by 2030.

“The first half of this year was 16-17%, the mandate states that all brands must be at 22% this year. June was 19%, but we will need to make up a lot in the second half of this year to recover the mandate deficit.

“It’s tough out there. Demand levels are much, much lower. It’s not unexpected as we’re moving from an early adoption phase to a mass market phase, it’s quite challenging, it’s bumpy.

“We see this instability here and in Europe, the difference is that here we don’t have incentives for private buyers like the European markets do.”

Criticism of rhetoric

Hawes appeared to criticize Sunak’s rhetoric on electric vehicles and called for positive messaging from the new administration.

“We’re asking for more financial support and incentives for consumers, but it’s also about messaging, and it doesn’t help if those messages are negative or seek to delay this transition. We need to sell these vehicles now, we are required to sell these vehicles now, and that means pull all the levers,” he said.

Charging Issues

Consumer concern about the national charging network is considered one of the barriers to the adoption of electric vehicles.

Hawes said the network was expanding, but called on the government to “force itself” to ensure it builds capacity ahead of demand.

Trade wars

The Labor Party has indicated that it will not meet the aggressive tariff regime imposed by the USA and EU on Chinese electric vehicles. Around 30% of EVs sold in the UK are made in China, including Tesla and Polestar.

“Any government, any industry, wants free and fair trade,” Hawes said.

“As far as we are concerned, we have not seen any manufacturers requesting a review or an investigation into Chinese electric vehicles. We will watch what the impact of the E.U. [tariffs] It is. We’ll see what happens and, as far as I know, the government has no plans to introduce tariffs.”