Car makers today demanded much greater support from the Government to help consumers buy electric vehicles if ministers’ ambitious ‘electric dreams’ are to become a reality.
Rule makers must ‘put ordinary drivers at the heart of policy and planning’ if they are to win consumers’ ‘hearts and minds’, they said.
Electric cars are still too expensive to make and own, out of reach for most people of modest means, and served by an electric charging network that is still not fit for purpose. There are too few charging point, and too many of those which do exist – around one in ten – simply don’t work, it said.
‘Put ordinary drivers at the heart of policy and planning’: Car makers call on the Government to increase incentives and the public charging network to encourage consumers to switch to EVs
Without help, the Government ambition of banning petrol and diesel cars by 2030 will be impossible to fulfil, the Society of Motor Manufacturers and Traders (SMMT) warned Transport Secretary Grant Shapps.
Mr Shapps, who owns an expensive Tesla Model 3 electric car and a guest speaker at the trade body’s day-long industry conference on electric vehicles held on Thursday morning, defended the recent decision to slash the Plug-in Car Grant (PiCG) thats designed to reduce the sky-high cost of EVs.
Compared to far more generous consumer electric car purchase incentives abroad and on the continent, UK consumers are being short-changed, SMMT boss Mike Hawes said.
The Plug-in Car Grant – a scheme designed to reduce the sky-high price of new electric cars – is lags behind similar incentives in other European countries, including Germany and France. The trade body said the Government needs to do more to make it financially viable for drivers to make the transition
Car manufacturers, industry commentators and electric vehicle campaigners have all blasted the Government’s decision last week to slash suddenly and without prior warning both the size of the PiCG by £500 to £2,500, and to reduce the cap on cars eligible to benefit for the scheme from £50,000 to £35,000.
By contrast, preserving the grant and providing consumer VAT exemption could increase electric car uptake by almost two thirds by 2026, said the SMMT.
The industry body has published new figures today showing businesses are twice as likely as consumers to make the switch from petrol or diesel due to the stronger incentives available to companies.
It added that 700 charge points needed to be installed daily to support the growing market.
It came as Labour unveiled its own incentive plans to boost the uptake of zero-emissions electric vehicles to reduce pollution.
Speaking this morning, Shadow Business Secretary, Ed Miliband, said owning a zero emission vehicle should be an ‘option for all.’
He called for interest-free loans to be offered for new and used electric vehicles to those on low to middle incomes to remove the upfront cost barrier; a quicker rollout of charging points on streets, targeting areas such as Yorkshire, the North West and the West Midlands; and part-financing the creation of three new gigafactories by 2025.
The SMMT this morning also published its own blueprint to deliver greater retail uptake.
It demanded for government and stakeholders ‘to prioritise overcoming consumer concerns through fairer incentives and a commitment to a dramatically expanded public charging infrastructure’.
The SMMT’s analysis of new car registrations in 2020 by the SMMT show that just 4.6 per cent of privately bought cars were battery electric vehicles (BEVs) – compared to 8.7 per cent for businesses and large fleets.
Consumers registered 34,324 pure electric vehicles in 2020, compared to 73,881 corporate registrations, it said.
The SMMT said: ‘Ahead of the phase out of new pure petrol and diesel car and van sales in 2030, manufacturers have invested billions in new technology, with plug-ins now accounting for one in four of new car models available – with one in 10 powered purely by electricity.
‘However, 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.’
Transport Secretary defends slashing PiCG
Transport Secretary Grant Shapps today defended the Government’s decision to slash the Plug-in Car Grant, despite the move coming at a time when ministers are trying to encourage motorists to make the switch to greener vehicles
Grant Shapps this morning has defended the Government’s move to cut the Plug-in Car Grant, telling the virtual SMMT conference they would now be better targeted.
And he insisted his zero-emissions plans for 2030, including the much-criticised roll-out of public charging points, were ‘on track.’
The grant had been reduced by £500 to £2,500 and the cap cut from £50,000 to £35,000 to make it more effective in attracting motorists of modest means to electric power and to ensure ‘value for money for taxpayers’, he said.
‘It’s to allow more motorists to go green. We’re focussing support where most consumers can go green.’
It had started originally at £5,000, he said, and remained under constant review.
The decision to bring forward the ban on petrol and diesel cars by 10 years – from 2040 to 2030 – had been made only after ‘careful consideration’, he said.
‘Yes, it’s ambitious for industry and government. But if there was a time to be ambitious it’s now as we build back after Covid.
‘We are on track to meet that 2030 deadline.’
He insisted the Government was investing heavily in many more public charging points. There are currently 20,000 publicly-available devices, of which just 3,900 are the fastest ‘rapid’ chargers.
Mr Shapps conceded: ‘We have much work to do, We have to reach the tipping point where choosing an electric vehicle is the natural thing to do – a no brainer.’
He said the Covid pandemic had increased the urgency towards transition: ‘We’re on a path which will not only transform motoring within a generation, but also the whole planet.’
A consultation on electric vehicles ends on April 10, he said.
To find out which models currently qualify for the Plug-in Car Grant, read our exclusive report.
Bigger and better incentives to switch to EVs for businesses over consumers
By contrast, businesses and company car drivers currently receive ‘stronger and longer-lasting motivation’ through reduced purchase taxes and fiscal incentives compared to consumers.
Compared to the now reduced grants available to UK consumers, the SMMT noted: ‘By comparison, private buyers in Germany receive a €9,000 grant towards a new pure electric vehicle, while Dutch drivers do not pay VAT on such purchases – equivalent to a purchase cost saving of around a sixth.’
Current projections suggest the majority of drivers will choose to charge their vehicle at home if they can, so the SMMT estimates there would also need to be around 2.3 million public charge points in service by 2030 to provide adequate coverage and tackle range anxiety.
‘That means 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,’ the trade body added.
Businesses currently have bigger and better incentives available to them to switch their vehicles to electric models than members of the public, SMMT bosses pointed out
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.’
Mr Hawes continued: ‘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.
‘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.’
While demand for greener cars is currently booming, more needs to be done to ensure drivers are able to go electric from 2030
Mr Hawes stressed that incentives ‘send out an important signal to customers’ and also helps ensure that the UK gets a sufficient supply of electric vehicles from manufacturers.
Jonathan Goodman, boss at electric vehicle manufacturer Polestar, said it was ‘a dangerous game’ to expect car makers to reduce margins beyond reason or even sell at a loss.
‘Ministers should stop changing the rules suddenly and without warning. The industry needed consistency, he said.
One in four available new models on the UK auto market can now be plugged in, one in ten now powered purely by electricity, said the SMMT.
This represents around 150 individual models, and that number is rising.
But SMMT chief executive Mr Hawes said: ‘We will only succeed if the consumer thinks they are affordable, they are convenient and they are the right choice for them.
‘This means giving people the incentives to buy them and the infrastructure to charge them. Both are currently lacking.’
He noted: ‘Electric vehicles may be cheaper to run but they are more expensive to manufacture and, therefore, to purchase.
‘If we are to ask consumers to change their behaviour, they need to be encouraged to do so. We can appeal to their good nature and their desire to save the planet but that won’t transform a market.
‘The ownership experience must be cheaper, more enjoyable and easy. That is not yet the case. It’s not so much a race to zero as a game of snakes and ladders.
‘That was because ministers kept moving the goal-posts. The industry needed consistency.’
Currently more than one in three households do not have a driveway or a designated parking space so would find charging difficult, a survey by the SMMT found
Half of Britons ‘not ready’ for electric cars in 2030
Almost half of drivers don’t believe they will be ready to drive an electric vehicle by 2030, when the sale of new petrol and diesel models will be prohibited by the Government.
Many UK licence holders believe that, because of cost and a lack of infrastructure, they will never drive one, said Mr Hawes; ‘We will not meet our goals if we do not change the hearts and minds of consumers.’
Currently more than one in three households do not have a driveway or a designated parking space so would find charging difficult.
Most early electric vehicle adopters can park and charge off street: ‘But those in flats, terraced houses, shared houses, cannot’, Hawes said.
In London, with a population of nine and a half million, there are only around 7,000 public charging points. One for every 1,300 people.
Scotland, has just over 2,000 public charging points for a population of five and a half million whereas Wales has 846 charging points for a population of more than three million.
Northern Ireland is worst off, with a mere 325 chargers for a population of nearly two million.
Mr Hawes stressed: ‘And here is another crucial point. In the UK, one in ten of existing charging points don’t work.’
Northern Ireland has a mere 325 public electric vehicle chargers for a population of nearly two million people
Government’s game of Snakes and Ladders with EV incentives
Taking a sideswipe at the Government playing a flip-flop game of ‘Snakes and Ladders’, SMMT chief executive Mike Hawes set out in his speech:
‘Declare a 2030 end of sale date and align the industry – climb the ladder.
‘Cut Plug-in Car and Van Grant – slide down the snake.
‘Increase rapid and ultra-rapid charging on major roads – climb up another ladder.
‘Reduce home charging grants – slide down another snake.
‘Secure favourable trade terms in Brexit and announce funding for automotive industrial transformation – climb up that next ladder.
‘Abolish Go Ultra Low, ignore road transport decarbonisation and infrastructure needs in your budget? Slither back down again.’
Mr Hawes said: ‘This sends the wrong message to investors. When other markets are increasing incentives, we are cutting ours.’
‘Government seems to have the automotive industry in its sights, but it seems to have lost sight of one vital player in this deal. The consumer.
‘The people who will have to buy the products if this ambition is to be met.’
Setting out why the Government risked losing consumer and voter confidence, he said: ‘Almost half of drivers don’t believe they will be ready to drive an electric vehicle by 2030.
‘Many believe that, because of cost and a lack of infrastructure, they will never drive one.‘
He noted that ministers could force the pace through draconian regulation – but warned:
‘The government could regulate the market to get us there. But it will be at a heavy price – in terms of investor confidence, government revenues and consumer acceptance.
‘We will not meet our goals if we do not change the hearts and minds of consumers.
‘That means giving consumers the incentive to buy electric vehicles.’
He concluded: ‘Make no mistake, the race to zero emissions is one the UK automotive industry can win – but not if that race is snakes and ladders.’
SAVE MONEY ON MOTORING
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.