The lack of incentivisation for private motorists to choose electric vehicles has again been highlighted by the Society of Motor Manufacturers and Traders as it fears the uptake of zero emission vehicles is “plateauing”.
Guests at the SMMT Annual Dinner in London were told the organisation has welcomed the investment made by vehicle manufacturers and others in the UK automotive industry to drive exports, yet the domestic vehicle market must not be neglected.
Mike Hawes, SMMT chief executive, said: “The industry is betting big on Britain, and government has rightly recognised the value that automotive manufacturing brings to the UK, backing our industrial transformation. These investments are, however, predicated on a strong domestic market.
Incentives for business buyers must be matched with support for private buyers to ensure the maximum return on every penny already pledged to production. The prize for success will be a faster and fairer decarbonisation of Britain, ensuring millions have access to zero emission mobility.”
The SMMT argues that halving VAT on new EVs, for instance, would be a compelling and affordable measure, enabling manufacturers deliver larger volumes of zero emission vehicles and creating the conditions for greater UK supply chain investment – one of the main ambitions of the government’s newly published Advanced Manufacturing Strategy.
“Combined with retention of the business incentives and measures to accelerate the roll out of charging infrastructure, the new EV market would expand and flow into the used sector, catalysing greater adoption by all drivers. This will be the fastest way to decarbonise road transport, an essential step in the delivery of Net Zero,” said the SMMT.
It has also highlighted that the industry’s potential to drive economic growth will be diminished without a deferral of upcoming Rules of Origin – otherwise, tariffs will apply, “throttling trade in electric vehicles between the UK and EU”.
It warned that time is running out to secure a deal before the end of year deadline that will ensure the free and fair flow of EVs across the English Channel.
Factories across the country are now producing electric vehicles of every type – cars, vans, buses and trucks – while the supply chain manufactures almost every component needed for EVs. The industry is ready to return to pre-pandemic levels of trade worth more than £100 billion by the end of the year, but the challenge is now to scale up even further to seize the opportunities decarbonisation offers.