Peter Vosper: This big cat electric car is starting to purr

As September starts with high hopes for a strong month the Ford Puma Gen-E becomes the first car to receive the highest grant amount of £3750 and has shaken up the marketplace with a personal contract hire agreement from £199 initial payment and monthly payments of £199 over a 24-month period (5000 miles per annum mileage allowance).

The E-Tourneo Courier has also become eligible for the £3750. Other models from other major brands are likely to follow but the rush will be on to get the necessary paperwork cleared.

This announcement should achieve the government’s objective of stimulating electric car sales as we move towards 2030, as it will make a number of the electric cars under £37,000, cheaper than their petrol equivalents, with the added benefit of lower running costs for those who can charge at home.

The Chinese brands, who have been effectively excluded from the grants, have announced their own reductions and will drive more electric sales during the month and the rest of the year.

Contract hire is well known to business users and will be popular with many private buyers. The only downside is the ability to change during the contract period but for many this is not a major issue. Buyers may be concerned at the lack of equity in the car at the end of the two-year period but the manufacturers will not want to lose their customers and will deal with this probably by a deposit allowance for renewals or continuing to offer contract hire agreements, if they become popular with private motorists.

The motor industry has been struggling with new electric car sales and will hope September will see a change as a result of this government action, combined with manufacturer offers, and improved infrastructure for charging. 

The price war in China has reached “fever pitch” according to manufacturers, BYD, who announced a drop in their profits, and expressed concern that “increased price competition” among Chinese EV brands had impacted the industry. This may result in more Chinese EVs coming to Europe and the UK.

Europe already has tariffs on these imports, and the UK has not followed suit, up to now. More Chinese manufacturers are setting up dealer bodies to sell their brands in the UK and their pricing is creating problems for their European rivals.

It is likely that if the Chinese use the UK to “dump product” then tariffs may well be be applied. For now, with the economy under pressure and rumours of further tax rises, expect Chinese brands to increase their share of the market in the UK. On the EV front Ford have shown they are prepared to compete, and my prediction is other manufacturers will have no choice but to follow.