Fleets ‘better served’ by electric vehicle incentives than consumers

New figures show businesses are twice as likely as consumers to make the switch from petrol or diesel to an electric vehicle (EV), says the Society of Motor Manufacturers and Traders (SMMT).

Analysis of new car registrations in 2020 show that just 4.6% of privately bought cars were battery electric vehicles (BEVs) – compared to 8.7% for businesses and large fleets.

In total, consumers registered 34,324 BEVs in 2020, compared to 73,881 corporate registrations.

Mike Hawes, SMMT chief executive, said: “While last year’s bumper uptake of electric vehicles is to be welcomed, it’s clear this has been an electric revolution primarily for fleets, not families.

“Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come.

“To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, Government and other stakeholders must put ordinary drivers at the heart of policy and planning.

“We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location.”

SMMT is calling for Government and stakeholders to prioritise overcoming consumer concerns through fairer incentives and a commitment to a dramatically expanded public charging infrastructure.

It says that consumer acceptance remains low because of concerns over affordability, charge point availability and infrastructure reliability.

Around one in three households have no dedicated off-street parking, leaving them disproportionately dependent on public charging points – of which around one in 10 are out of order at any given time.

Businesses and company car drivers currently receive stronger and longer-lasting motivation through reduced purchase taxes and fiscal incentives compared to consumers, says the SMMT.

Or example, the new super-deduction tax relief, announced in the Budget, can be applied to the purchase of new vans and trucks, HMRC has confirmed.

Both, however, felt the cut to the Plug-in Car Grant (PiCG) last week, the effect of which will add £500 to the cost of every BEV under £35,000, and £3,000 to those costing more than £35,000, as the grant is removed from electric vehicles over that price.

By comparison, private buyers in Germany receive a €9,000 grant towards a new BEV, while Dutch drivers do not pay VAT on BEV purchases, equivalent to a purchase cost saving of around a sixth.

SMMT estimates that maintaining the plug-in grant and similarly exempting consumer EV purchases from VAT would increase uptake by almost two-thirds by 2026 compared to current predictions.

Given present projections suggesting the majority of drivers will choose to charge their vehicle at home if they can, SMMT also estimates that there would need to be around 2.3 million public charge points in service by 2030 to provide adequate coverage and tackle range anxiety – meaning more than 700 new charge points would have to be installed every day until the end of the decade.

By comparison, the current installation rate is approximately 42 a day.

“When every market is vying for these new technologies, a clear and collaborative strategy engaging all would ensure the UK remains an attractive place both to manufacture and market electric vehicles, helping us achieve our net zero ambition,” concluded Hawes.