Government inaction on electric car incentives draws criticism amid sales surge

Electric car sales in the UK are surging, fuelled by steep discounts from manufacturers and dealers. However, industry leaders and electric vehicle (EV) advocates have voiced disappointment over the Chancellor’s recent budget, which omitted incentives for private buyers to adopt zero-emission vehicles.

Proposals to cut the 20 per cent VAT on EVs and reduce public recharging VAT to match the 5 per cent rate on home charging went unaddressed, raising concerns about the government’s commitment to supporting the EV transition.

Rachel Reeves, the Chancellor, reportedly overlooked these recommendations as September’s data from the Society of Motor Manufacturers and Traders (SMMT) showed a 24 per cent year-on-year increase in EV registrations. Electric cars now account for one in five new registrations, suggesting that heavy discounting has temporarily driven demand. However, SMMT warned that this level of discounting is unsustainable, and with ambitious government targets for EV adoption, industry experts worry about the impact of weak policy support.

Auto Trader reported that October’s market interest in EVs remained around 20 per cent, with average prices down by more than 12 per cent from last year. Yet, Ian Plummer, Auto Trader’s commercial director, noted that this growth might be slowing, cautioning that consumer interest could wane without further support.

Mike Hawes, SMMT’s chief executive, called the budget’s lack of substantive EV support “hugely disappointing,” citing concerns over the achievability of the government’s ambitious EV targets. Quentin Willson, founder of the FairCharge lobby group, criticised the Chancellor’s decision to freeze fuel duty, equating it to a fossil fuel subsidy that undermines zero-emission goals.

Meanwhile, Matt Galvin, UK managing director of Polestar, argued that the government’s approach has been overly punitive on manufacturers, imposing penalties of up to £15,000 per car for falling short of the 22 per cent sales threshold, while offering minimal incentives for consumers.