The adoption of electric vehicles (EVs) in the UK has seen a remarkable 21-fold increase since 2018, and these eco-friendly cars are now being purchased at a rate of one every 60 seconds. They currently constitute 16% of all vehicle sales in the country, and this figure is projected to rise to 17.8% by the year’s end.
While individual consumers initially spearheaded the surge in EV purchases, the market landscape has since evolved, with fleets and business buyers now dominating the scene. The Society of Motor Manufacturers and Traders (SMMT) is pressing the government to provide enhanced incentives to private consumers, ensuring the continued growth of EV adoption.
The termination of the Plug-in Car Grant by the government last year left the UK as the sole major European market without incentives for consumer EV purchases. Consequently, the proportion of private buyers in the EV market has dwindled from more than one in three to less than one in four.
Despite these setbacks, the demand for electric vehicles remains robust, with a substantial 68% of non-EV drivers expressing an interest in transitioning to electric power. However, only a mere 2% of them plan to make the switch this year, and 17% are considering doing so in 2024. More than half of the potential EV adopters are deferring their purchase until 2026 or even later.
The SMMT is now advocating for government intervention in the form of reduced Value Added Tax (VAT) on EV purchases. This move would align with existing discounts on other environmentally friendly products, such as solar panels and heat pumps. The SMMT is also proposing an increase in the threshold for the Vehicle Excise Duty’s “expensive car supplement” or, alternatively, an exemption for EVs.
Mike Hawes, Chief Executive of the SMMT, emphasized,
“We are entering a new phase in the UK’s EV transition, in which Britain can, and should, be a leader. We have the industry, the enthusiasm for new technology, and the capacity to succeed. The government has recently demonstrated its commitment to EV manufacturing in the UK, and this commitment must extend to the consumer. With a new, yet-to-be-finalized Zero Emission Vehicle Mandate set to revolutionize the market in just over 100 days, supply must be met with demand. A comprehensive set of measures would encourage households throughout the UK to make the switch to electric vehicles, boosting an industry slowly recovering from the pandemic and delivering benefits for the national treasury, society, and the global environment.”
