The government faces criticism from car manufacturers over rules meant to promote electric vehicles (EVs). Car makers argue that current regulations are too strict, and demand for EVs is lower than expected. This has led to job cuts, like Ford’s decision to lay off 800 workers in the UK. Vauxhall’s owner, Stellantis, will also close its Luton van plant partly due to these rules. So, what can be done to increase EV sales?
1. Subsidize the Cost of EVs
Electric cars are generally more expensive than petrol or diesel cars. This is due to the smaller scale of production and high battery costs. Although the government offers some subsidies, like lower company car tax and salary sacrifice schemes, these do not benefit everyone. Experts suggest introducing interest-free loans for lower-income drivers and reducing VAT on new EVs to make them more affordable.
2. Increase the Availability of Cheaper Electric Cars
The cost of EVs is slowly decreasing, mainly due to cheaper battery packs. For example, Stellantis recently offered an electric version of its Frontera model at the same price as its petrol hybrid. However, low-budget options are still scarce. Manufacturers often focus on higher-priced models, but more affordable cars like the Dacia Spring and Leapmotor T03 are becoming available. As competition grows, prices will likely continue to fall.
3. Eliminate Confusion About EV Policies
The government has changed its target for banning petrol and diesel car sales, which has confused consumers. Originally set for 2040, the ban was brought forward to 2030 and then delayed to 2035. Industry insiders believe these shifting deadlines have caused uncertainty. To address this, clear and consistent communication is needed to help consumers make informed decisions about buying EVs.
4. Lower VAT on Public Charging Points
Charging an EV at home costs less than using public charging points. Public chargers are taxed at 20% VAT, while home charging is only taxed at 5%. This higher rate discourages people who can’t charge at home. Industry experts, including consultants and government committees, have called for the VAT rate on public chargers to be reduced to 5%, to make charging more affordable for everyone.
5. Improve the Public Charging Network
Concerns about the charging infrastructure are one of the main barriers to buying an EV. While the number of charging points has increased, many users still face long waits or broken chargers. The government aims for 300,000 charging points by 2030, but the expansion rate is too slow. Delays in planning approvals and grid connection issues are some of the obstacles. More support is needed to speed up the process and expand the network.
By addressing these issues, the government can help boost EV sales and make electric cars a more attractive option for consumers.
