The Government has been told it must do more to help drivers transition into electric vehicles including considering scrappage schemes, as they face a ban on the purchase of new combustion engines by 2030.
The move to bring forward the ban by ten years was welcomed by green groups and industry bodies as a clear signpost to help spur the market.
But Mike Hawes, the chief executive of the Society for Motoring Manufacturers, said “success will depend on reassuring consumers that they can afford these new technologies.”
The SMMT is calling for more spending on purchase incentives, after the Government promised £582 million in grants to encourage people to make the switch.
Edmund King, the president of the AA, called for scrappage schemes for a means-tested scrappage scheme.
“We do feel that the Government could consider a means-tested scrappage scheme to help those on low incomes to go electric,” he said.
“Consistently, the barriers to EV ownership are: the initial cost of the car and availability, perceived single-charge range anxiety and charging infrastructure – particularly for the third of drivers without off-street parking.
If we can tackle these issues with considerable investment and focus, the electric revolution could flourish.”
Although studies show that electric cars are cheaper over their lifetime when factoring in fuel prices, the upfront costs of an EV – which start from around £11,000 – make them prohibitive for many consumers.
The SMMT is calling for VAT exemptions for all zero emission capable cars, which it says would reduce the upfront price of a family electric car by an average of £5,500, and for an electric SUV by up to £9,750.
Sales of used combustion engine cars will still be allowed after 2030, and there are no plans to outlaw their use on the road.
But there are concerns that rising disincentives for petrol and diesel drivers, such as low emission zones, will significantly increase the cost of driving a combustion engine over the next ten years.
Adrian Dally, the head of motor finance at the Finance and Leasing Association called for a green finance guarantee to help potential new EV drivers.
“Demand for petrol and diesel cars in the used market will likely to continue for some time.
“We expect new and used car prices to remain in balance, so we would not expect to see a residual value shock, but rather a gradual phasing out of internal combustion engine (ICE) vehicles.
“Electric vehicles will remain more expensive to buy and finance than ICE vehicles for some time yet, which is why we are looking to Government for a green finance guarantee to support the transition.”
