UK car manufacturers are urging the government to take a proactive approach to make electric vehicles (EVs) more commonplace. Mike Hawes, the CEO of the Society of Motor Manufacturers and Traders (SMMT), dismissed concerns about taxpayers’ money being spent on investments in UK factories for EV production. Last week, BMW announced a £600 million investment in its Mini factory in Oxford to manufacture electric cars, with £75 million of government funding. This adds to the start of EV production at Stellantis’ factory in Ellesmere Port, also supported by taxpayer money.
During the SMMT’s Electrified 2023 conference, Hawes emphasized the importance of government support for manufacturers. He stated that investment in both manufacturing and the market is crucial for the transition to electric vehicles. While the market share of battery electric vehicles in the UK has significantly increased, with an anticipated share of 17.8% by the end of this year, the increase in demand mainly comes from corporate purchases rather than private buyers.
The SMMT highlighted that the UK is the only major European car market without consumer incentives for EV purchases, despite having the most ambitious timeline for the phased-out elimination of conventional fuel cars. Hawes called for specific support, including reducing value-added tax (VAT) on public charging and EV purchases, exempting EVs from luxury vehicle tax in motor vehicle tax, and a national plan to improve the charging network.
A survey commissioned by the SMMT revealed that while over two-thirds of non-electrified drivers in the UK want to switch to electric vehicles, only a small percentage plan to do so this year. Alex Smith, Managing Director of Volkswagen Group UK, pointed out that the gradual withdrawal of incentives has led to a stagnation in demand from private EV buyers. He emphasized the need to demonstrate the affordability of EVs throughout the ownership cycle and suggested that incentivization in the private market continues to play a role in indicating the direction towards electric mobility.
Sources: SMMT, Savanta