Experts warned that the government needs to provide more incentives to get more electric car drivers interested in switching before the end, according to experts.
Auto Trader’s Commercial Director Ian Plummer said that electric vehicles would’remain the preserve for the wealthy’ if higher prices are not made possible. And failure to make them available could mean the UK is unable to reach its green targets.
Plummer, speaking at the COP26 Climate Summit on Wednesday – a dedicated day to transport and automobiles – stated that the UK is in danger of falling behind European countries as manufacturing may prefer to target markets such as France or Germany which offer better incentives to consumers and industries.
Lack of incentives for electric vehicles could cause UK to miss green goals: Today, Auto Trader urged MPs in the UK to increase subsidies to make EVs affordable.
Calls for a boot to EV incentives comes just weeks after Chancellor Rishi Sunak announced in the Budget a fresh £620million investment in ‘targeted grants’ to help motorists buy plug-in cars and to boost the nation’s network of on-street charging points.
Auto Trader argues that this investment would not be sufficient to support 120,000 EV purchases, even if it were used for EV sales.
Even with subsidies, EVs would not be affordable for families of lower and middle income.
Auto Trader calculated that an average new EV costs 38% less to buy than a comparable petrol or diesel engine.
However, it is the exact same for second-hand models. This means that most motorists with smaller financial resources buy their motors.
A year-old used electric family hatchback, for example, is on average £10,000 more expensive than a similar-size model with a combustion engine under the bonnet.
Because of the high cost of EVs, demand comes almost exclusively from those who are wealther than others.
Six of the 10 most popular areas for EV ownership, according to it, are located in affluent London neighborhoods like Putney and Kensington.
The UK’s pattern shows the same. There is more interest in wealthy areas such as Harrogate, Bath, and south Manchester.
In fact, compared with the car buying average, those registered the biggest interest in making the switch are twice as likely to have a household income of £75,000 or more.
Auto Trader found out that when you look at just income, the largest earners will be most keen to purchase an electric car.
The only subsidy in place in the UK that makes electric car more affordable is the £2,500 Plug-in Car Grant, though that is only in place for new models and is due to be terminated in 2023
Plummer says that the Government and Industry must grasp this dilemma if they want to accelerate mass adoption.
“Incentives will be needed to help bridge the gap for those that simply can’t afford the higher-priced EVs.
“We previously stated that price parity is our expectation by the middle decade. However, this is not an absolute certainty.
There are many factors that need to be considered, including serious government support in order to reduce the gap between current and future prices. It should also be used for new and old vehicles.
He said, “Without these incentives, it’s doubtful that will we see the volumes required to drive the kind of economies of size necessary to achieve ICE/EV price parity.”
“As it stands, the Plug-in car Grant will be withheld in 2023 and the tax benefit in-kind in 2025.
The UK’s incentives play such an important role in driving demand that manufacturers may lose interest if they are not aligned to other European markets.
The UK’s EV driving system is at high risk of being left behind by other European countries, such as France and Germany
Plummer believes there are clear signs that car buyers want to switch to green. However, in order for mass adoption to occur, electric cars must offer consumers an edge either in convenience, cost or both.
They do not provide any services and must be improved. The easiest way to attract them is to lower their prices and offer incentives.
Plummer explains, “The vast majority of European countries set smaller targets than the UK to end petrol and diesel exports, but the steps they took to promote EV adoption were more significant.”
It really shames the UK when you consider France and Germany as an example.
Since many years, EV drivers in the United States have been able to take advantage of a range of incentives that are aimed at both decreasing costs and making ownership more simple.
Norway offers the best financial incentives.
They include substantial grants, zero road tax, no VAT and reduced company car taxes.
Parking was free until recently and charges are still capped at 50 per cent of the maximum and EV drivers in Norway can even use bus lanes.
Sales volumes will rise if there are more such benefits – Norway has EVs representing more than 70% of all registrations for 2020.
Auto Trader warned UK politicians about the possibility of manufacturers favoring other countries like Norway in order to deliver new plug-in vehicles with longer ranges and best performance. They know full well that their market is much more interested in zero-emission vehicles.
Auto Trader believes the UK may fall behind when it comes to achieving its green goals, as other European nations offer more attractive incentives for EV ownership.
The emphasis on performance should be placed in EVs, and not only eco-credentials that can boost sales.
Auto Trader says that manufacturers and retailers must change how they sell EVs, shifting from sustainability and eco benefits to personal benefits such as better performance, pleasure, and lower total costs.
Plummer said that when owners list what they most value about their vehicles, electric cars outperform petrol models in terms of performance.
“But it’s how these cars get marketed that the pure joy of driving is obscured.
The report also urged car manufacturers to offer a greater selection of vehicles, particularly towards the lower end of the market.
Around 20 per cent of all views of new cars on its site are for models under £20,000, yet there are just four electric models within that price bracket.
Similar rules apply to the Plug-in Car Grant.
Only zero-emission models priced at £35,000 qualify for the £2,500 subsidy, which prices most of the market out of the scheme, including every Tesla on sale and the latest releases from Ford and premium rivals including Audi, BMW and Mercedes-Benz.
> You can find out which electric cars are currently eligible for the PiCG in our report here
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