New DfT report suggests green transport ‘carrots’ needed

Plans for free car parking and a cut in VAT for electric vehicles are two ‘carrots’ that could be dangled to persuade consumers to transition away from petrol and diesel vehicles.

The move, outlined in a report for the Department for Transport by the Transport Research Laboratory and the Behavioural Insights Team, claimed financial incentives would be one of the “most effective and popular levers policymakers can adopt”.

It said such policies would offer a “positive impact” in the short to medium term. Additionally, it also called for a pricing standard to illustrate the cost of an EV compared to an ICE vehicle.

The study follows reports that sales of ICE vehicles will be banned from 2030 and the DfT is now looking at ways to actively incentivise consumers in buying EVs.

The coronavirus crisis has added to the acceleration of EVs with air quality being considered as a contributing factor to the severity of the disease, according to some reports. Regardless of coronavirus, it is claimed that 40,000 pre-mature deaths are linked to air pollution as a contributory factor.

EVs currently make up around 5% of the total sales of vehicles in the UK, which despite being a significant rise on 2019, is still well below the necessary levels to remove ICE sales from the marketplace.

If the new incentives were put in place, the VAT cut would take £5,600 off an average family car, and when added to the government’s current £3,000 grant would significantly lower the overall cost for an EV.

But think tanks have argued that requirements should be placed on manufacturers to sell a specific, growing proportion of EVs each year, rather than place the burden on consumers to buy them.