When the government controversially removed its discount on the purchase of electric cars last summer, the move was justified on the grounds that its job was done. After 11 years of subsidies, the ministers said, the electric vehicle revolution had “kicked off.” As Britain scrambles to meet a 2030 target of ending the sale of new petrol and diesel cars, that judgment is starting to look a bit complacent.
Amid continued economic headwinds, data has emerged suggesting a drop in current demand for electric cars, despite notable public enthusiasm for their early adoption. Auto Trader, which hosts the country’s largest auto sales website, reported this month that inquiries related to new electric vehicles had dropped significantly compared to last year.
Several factors are likely involved. With interest rates and inflation still high, the initial cost of a new electric car makes it more expensive in the short term than a gasoline or diesel car. The fall in oil prices may have diminished the immediate incentive to switch. At the same time, despite repeated promises from Whitehall, the deployment of charging infrastructure remains too slow and does not keep pace with sales.
Under Boris Johnson, the government forecast that 300,000 publicly available chargers would be needed by 2030. Reaching that number would require installing 100 chargers per day, but the current rate is estimated to be around a fifth of that. For low-income families who do not have the option of charging their cars in garages or driveways, the problem is compounded by current electricity prices and the substantially higher VAT rate paid at charging points. public.
The net result is that while EV sales are growing in absolute terms and company fleet sales are strong, partly as a result of specific incentives for employers, electric new vehicle market share is not it is speeding up as it should. For mass adoption to take place in tough economic times, the government needs to do much more to make electric cars affordable through creative grants and subsidies. Loans should be cheaper and more easily accessible, offsetting the initial costs. The 20% VAT rate that applies to public charging points should be reduced to match the 5% domestic energy rate. The decision of the chancellor, Jeremy Hunt, to end the exemption of electric cars from road tax from 2025 should also be reconsidered.
Such a major social transformation should not be attempted cheaply, risking creating losers along the way. Along with the imperative to achieve environmental sustainability goals, a question of social equity looms on the horizon. If popular acceptance of the green transition is to be safeguarded, the choice to own an electric vehicle must not be limited to the wealthiest early adopters and those lucky enough to qualify for a company car. Manufacturers must do more to develop affordable options if they are to meet mandatory targets on the road to 2030. But the government must do more than just wave a big stick and threaten punitive action from the sidelines if those targets are not met.
The government’s climate change committee has described the full transition to electric vehicles as one of the key actions to achieve the UK’s net zero emissions targets. Ministers run the risk of not ensuring that everyone participates in the trip.