The automotive industry has called on government to act fast to convert Britain’s electric sceptics to the benefits of EVs, the Society of Motor Manufacturers and Traders (SMMT) has said.
The new SMMT publication, In It Together: Why every sector wins with EV volume, published today, explores how larger EV volumes boost business for multiple sectors beyond automotive, and how those same sectors can play a vital role in driving up EV uptake themselves – creating a virtuous carbon-cutting circle of economic growth, cleaner mobility and social change.
By using purchase incentives to stimulate greater demand, fresh measures would boost the market by a further 15% on top of current outlooks – delivering a total of two million new EVs by 2028, it claimed.
The new modelling by the SMMT suggests that under current market conditions, 1.782 million new EVs will be registered between 2025 and 2027.
Growth could be accelerated by halving VAT on new EV purchases which would drive up demand by a further 15%, putting 267,000 additional new EVs on the road. This would raise registrations to 2.05 million EVs.
While such a step would incur a temporary cost to the Treasury – an average of around £1,000 per car – the past five years have seen the UK Government accrue a £2.5 billion VAT receipt windfall as EV uptake has increased tenfold.
The measure, when combined with flexible regulation and mandated chargepoint rollout, would help drive a bigger and cleaner new car market, driving down CO2 emissions by six million tonnes a year – equivalent to cutting UK aviation emissions by almost a sixth and stimulating growth nationwide.
A new survey by SMMT, conducted by Censuswide, also reveals that 23.1% of would-be new car buyers surveyed plan to get into an electric car between now and 2028 – which is below the government’s aspiration, which calls for a 28% EV market share this year alone.
The study also suggests that the EV market is highly reliant on drivers who have already gone electric, comprising almost half (48.7%) of respondents – while fewer than one in eight (11.6%) new buyers polled are actively intending to switch to an EV.
But government support could transform the market, according the SMMT, with purchase incentives, along with greater chargepoint rollout and a reduction in the cost of charging through a VAT cut, encouraging around two in five consumers to drive electric.
Mike Hawes, SMMT Chief Executive, said:
“Manufacturer investment has meant ten times as many drivers are going electric compared with just five years ago. This is great progress but, with the right support for consumers, we can go beyond current expectations to put a total of more than two million new EVs on the road by 2028.
“Government investment to convert the ‘electric sceptics’ would energise business across the country far beyond just the automotive sector. Every stakeholder would benefit from the impact of consumer incentives which, when combined with binding targets for chargepoint rollout and more flexible regulation, would create a virtuous circle of rising demand that stimulates green economic growth.”=
