With the government recently announcing that from 2030, no new petrol and diesel cars can be sold, it looks like electric cars are set to become the new norm.
However, EVs have accounted for just 5.5 per cent of new car registrations in 2020, meaning there are plenty of challenges ahead to get people behind the wheel of battery-powered models in the next decade.
And now the UK’s automotive trade body, the Society of Motor Manufacturers and Traders (SMMT), is considering asking the government to remove VAT from the price of EVs to help incentivise then.
On a typical £30,000 electric car, taking 20 per cent off for VAT would make it £6,000 cheaper – double the £3,000 incentive currently provided by the government for new EVs.
Mike Hawes, chief executive of the SMMT, told Autocar: “We’re being asked to go from about 15 per cent of the market to 100 per cent being electrified in nine years. That’s a speedy transition. An incentive would accelerate that transition.
“We can see that globally, other markets are putting considerable incentives to drive consumer uptake, and we must do more. Removing VAT is one idea that we have proposed.”
The majority of European countries incentivise electric car purchases through either grants or various money-saving schemes. For example, in Norway, where almost half of all new cars sold are electric, EV drivers are given half-price access to ferries, public parking and toll roads. Grants worth up to around £8,000 are also available for electric cars in France and Germany.