Government planning scrappage scheme to boost EV sales

The Government is set to launch a fresh incentive for UK car buyers to swap their petrol and diesel cars for an electric vehicle (EV).

A new scrappage scheme offering £6,000 off the price of an EV is expected to be announced by the Prime Minister Boris Johnson on July 6, according to reports by the Telegraph.

The scheme is expected to help boost the UK economy in the wake of the Coronavirus pandemic and also encourage the take-up of zero-emission vehicles.

Edmund King, AA president said: “Offering £6,000 to swap a petrol or diesel car for an electric car would be a fantastic move, and should it get the green light people should take up the deal.

“At the start of the year we said that scrapping VAT on electric vehicles would be the most influential move to persuade drivers to go electric. A grant like this would be just as good and would help both car manufacturers and air quality.

“In order to help aid the economic recovery to Covid-19, investment should also be made in gigafactories. This would mean batteries could be developed, built and recycled in the UK to keep our carbon footprint down, while producing highly skilled jobs. We also need more charging points to help convince drivers that they can always get home”

The Government first introduced a scrappage scheme in 2010, to boost the economy after the financial crisis. It led to the sales of 400,000 new cars in 10 months, at a cost of £400 million.

Car makers are already calling on the Government to introduce an economic stimulus scheme after new car registrations were down 97% in April and 89% in May.

Last month, the PSA Group confirmed it was in talks with the Government about the possibility of incentives to boost the automotive retail sector, with managing director Alison Jones telling BBC Newsnight that, while she did not expect demand among car buyers to “come back” until Q4, a CO2 emission-based scrappage scheme was being discussed.

Ford of Britain managing director Andy Barratt, meanwhile, insisted that the car makers will not be able to return sustainably to pre-crisis levels of production unless the government does something to stimulate demand for new cars.

Car comparison site Leasefetcher says since the lockdown restrictions were eased, there has been a significant boom in demand across the automotive industry - so much so that the demand is now parallel with the numbers pre-lockdown. It says the surge in demand is especially evident in the electric vehicle industry.

James Hind, CEO of carwow, added: "We support that the scheme should further encourage electric vehicle buyers, but strongly advise that any scheme should also encourage plug-in hybrid and hybrid purchases as well. The reality is that there is a relatively limited number of pure electric cars still that consumers can choose from, and most are far more expensive than the average new car on sale. Extending the scheme, even if at reduced contributions, to plug-in hybrids and hybrids would help encourage far more people to trade-in more polluting older cars and help the industry. 

"In Germany the government last week announced incentives backed by the government, on the carwow Germany site we saw a tripling in activity on the days following the announcement, showing the huge stimulus government action can have on new car sales."