Why the UK Government is Making it Hard to Hit EV Targets

The recent spring budget did not include any incentives for electric vehicles, which was not surprising. Car manufacturers have reacted strongly to this omission, feeling pressured to push EVs to buyers even if there is limited demand. The UK is struggling to reach its goal of 22% EV sales this year, currently stuck at 16%. Private demand is low, with less than 20% of EV sales coming from individual buyers.

Calls for incentives have been growing louder, with suggestions such as halving VAT on new EV sales to 10% and reducing VAT on public charging from 20% to 5%. Other proposed measures include extending favorable VED rates for EVs, maintaining low BIK tax rates for fleet buyers, and eliminating insurance tax on EV policies.

Unfortunately, the chancellor did not implement any of these measures in the budget. This lack of action has led to criticism from industry leaders, with some warning of an impending EV crisis. Without government incentives, consumers have little reason to switch to EVs, especially during a cost of living crisis.

Car manufacturers are facing penalties for not meeting the EV sales target, particularly impacting mainstream, lower-priced models. Some believe that the government should focus on bridging the gap between current EV sales and the target rather than incentivizing buyers who would purchase an EV regardless.

The debate around a VAT cut for EVs continues, with proponents arguing that it would be cost-neutral to the Treasury. The government may need to reconsider its targets and provide support to the industry to avoid falling short of its net-zero carbon emissions goal by 2050.

Overall, the lack of incentives in the budget has left private car buyers with no additional motivation to purchase EVs. It remains a missed opportunity for all parties involved.