Motor industry calls for measures to reduce the cost of electric vehicles

The Society of Motor Manufacturers and Traders (SMMT) and the National Franchise Dealer Association (NFDA) have both called on the Government to take action to get electric vehicle sales back on track by taking the following actions.

1.Support private buyers by reducing the VAT from 15% to 7.5% on the purchase price for the next three years

2. Commit to providing mandated targets for charging points rollout to give confidence and convenience of recharging.

3. Reduce VAT on public charging to 5% in line with the home charging.

The new car and van markets were both up in 2023 by 7.9% and 21% respectively but the electric car share dropped to 16.5% and in 2024 manufactures and their dealers must increase this to 22% to avoid fines of £i5,000 for ever vehicle short. The market is also misleading as private car sales remained flat and the growth was all through fleet sales.

I recommend those of you have the opportunity to have a home charger which can charge at off-peak times as little as 7p a kilowatt-hour (kWh) of electricity compared with roadside chargers at 48 a kWh, according to the AA motoring group which will make significant savings. Added to this those who have an electric car which can have home charging and is not used for long journeys will also make good savings with little necessity to use public chargers. Ask your dealer to calculate the differences between petrol costs and electric costs from a home charger. The used car prices of electric cars have dropped during 2023 and are closer to their petrol equivalent so its worth looking at these at a way of moving into an electric car.

Unfortunately, it’s unlikely the government will reduce the price of new electric vehicles this year, as their priority will be to find cost savings through tax cuts or contributions to energy costs as well as reducing inflation and interest rates for the voters at the General Election later this year. There are new models and cost reductions from some manufacturers and there will a number of new entrants from China. BYD and Ora have already appointed dealers and already announced new products and Chery are in the process of appointing up to 50 dealers for their Omoda brand, arriving in March.

This will grow to around 100 by the end of the year with another of their brands, Jaecoo, arriving in the summer. These manufacturers will be followed by others, plus new technology which will provide more choice and competition for the European and other manufacturers. These manufacturers will offer petrol engines alongside electric models to satisfy customer choice and grow their brands until electric product becomes mandatory.