Zero company car tax is boosting BEV registrations, says Cornwall Insight

The Government’s decision to introduce zero benefit-in-kind-tax for battery electric vehicles is having a positive effect on BEV registrations, says analysts Cornwall Insight.

Latest registration figures from the SMMT show that 8,162 BEVs were registered in July out of a total 174,887 vehicles.

Katie Hickford, analyst at Cornwall Insight, said: “Resilient demand for BEVs appears to be driven by four key factors.

“From April 6, changes to the benefit-in-kind company car tax means zero emission vehicles pay no tax in 2020-21, providing an incentive for businesses to transition their fleets.

“Also, there have been changes to the plug-in grant in the March 2020 Budget, meaning that hybrid cars with fewer than 70 zero emission miles are no longer eligible for funding.

“Uptake is further improved by an increased range of vehicle models available, meaning a greater choice for both consumers and businesses.

“These newer vehicles bring with them an improved vehicle range, making them much more of an attractive proposition to customers.

“Perhaps more importantly, during this Covid-19 period, is that EVs still have longer lead times between ordering and delivery compared to petrol and diesel cars.

“Although this is starting to improve, many vehicles will be been pre-ordered and therefore less impacted by the lockdown.

“The last few months have provided a snapshot of how BEV sales may look in a few years, where the expectation is that BEVs will account for a third of monthly new vehicle registrations.

“However, whether the Government’s EV uptake measures can boost uptake and defy the economic conditions is yet to be seen.”

A recent Survation survey of more than 500 UK companies found that 30% of businesses were already using EVs, while 46% have active plans to make the transition and a further 16% have begun to discuss it.

For those who have not yet made the switch, 50% think they will have transitioned within five years and one-third (35%) this it will be within two years, well ahead of a ban on the sale of new petrol, diesel or hybrid cars in 2035Z