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VAT cut and more chargers: what can be done to sell more electric vehicles

Here is what could make electric cars more appealing to customers

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Sales of electric cars dipped in December 2023, according to the Society of Motor Manufacturers and Traders (Photo: John Walton/PA Wire)
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Sales of electric vehicles (EVs) fell by 34.2 per cent in the last month of 2023, as demand waned, according to a leading motor industry body.

Although 1.9 million new cars were registered in 2023, Society of Motor Manufacturers and Traders (SMMT) data shows, less people were looking for electric alternatives to diesel and petrol vehicles.

The SMMT attributed this to an “abnormal” December 2022 when sales were up by 38.7 per cent as businesses chose the final month of the year to invest in large fleets.

Incentives are needed to help increase sales of EVs, it said. So what can be done to increase sales?

Reduce VAT on electric vehicles

Reducing VAT, the SMMT claimed, would stimulate demand by reducing price tags by around £4,000 on average, and would be similar to the tax incentives available for fleets purchasing new electric cars.

Currently, if you are purchasing or leasing an electric car for personal use, you are subject to 20 per cent VAT and cannot reclaim it.

Reducing it would result in an estimated 250,000 additional battery electric new cars on the road over three years, the SMMT added.

Reintroducing the grant scheme

Only one in 11 private consumers in the UK buying a new car last year chose a battery electric model.

This could be a product of scrapping the Government scheme that enabled people buying new electric cars to claim grants of up to £1,500 each. It was removed in June 2022.

Mike Hawes, chief executive of SMMT, said the UK’s market share for those cars was “probably in the bottom half in Europe”, below nations such as France, Germany, Ireland and Portugal.

Mr Hawes said: “The Government has challenged the UK automotive sector with the world’s boldest transition timeline and is investing to ensure we are a major maker of electric vehicles.

“It must now help all drivers buy into this future, with consumer incentives that will make the UK the leading European market for ZEVs (zero-emission vehicles).”

More chargers

Fear of not being able to find a charging point has lead many drivers to experience “range anxiety” when using their electric vehicle, and is believed to be a deciding factor in drivers opting for fossil-fuel powered cars instead.

There are 49,220 public electric vehicle charging devices available in the UK, according to the Department for Transport. Of these, 8,908 were 50kW and above.

The number of charging points has risen 46 per cent since November 2022, but the RAC earlier this week claimed the Department for Transport missed a target to have at least six rapid or ultra-rapid chargers – those above 50kW – at every motorway service station in England by the end of 2023.

The RAC said four sites had no charging facilities at all.

Improving driving range and cost

Driving an electric vehicle is set to get more costly from April next year, when drivers of EVs will start to be charged road tax.

But the range of EVs varies, from 100 to 400 miles on a single charge.

The more expensive the EV the longer the charge. The BMW i4 eDrive40 did 365 miles on a single charge, but will set a driver back £50,000 when bought new.

A Tesla Model S can travel over 400 miles on a single charge but comes in at £90,000.

BYD, which rivals Tesla as the world’s largest seller of EVs, has models priced £30,000 that claim to have a single charge range of 200 miles.

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