The UK’s electric vehicle industry shares disappointment and concern over the government’s Spring Budget 

  • EV industry disappointed in Spring Budget for lacking incentives and strategic policies for emobility transition.
  • Concerns include public charging costs, VAT cuts, support for electric vans, and the need for accessible charging.
  • Vauxhall, Fiat UK, Drax and Auto Trader criticises budget, calling for incentives for urgent market stimulation.

The UK government’s Spring Budget was expected to breathe new life into the nation’s emobility prospects, but the reality is far from ideal

The recent Spring Budget by Chancellor Jeremy Hunt has stirred mixed reactions in the electric vehicle (EV) industry. Key players have expressed disappointment and concern about the lack of incentives and strategic policies to drive the transition to emobility. Organisations, collaborations, manufacturers and campaigners have been calling on the chancellor to increase incentives and push for further EV adoption at this critical juncture. 

Adam Hall, Director at Drax Electric Vehicles, voiced disappointment for fleets and drivers due to missed key policies

Adam Hall highlighted issues in public EV charging costs, focusing on VAT cuts and support for electric vans through the Zero Emissions Van Plan. The plan was submitted in Parliament, and called tax cuts and regulatory reforms to make electric van adoption more feasible for fleets and individuals.

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Hall stated: 

“While investment packages in cutting-edge technology and manufacturing is valuable, there must be greater emphasis and understanding of the challenges that EV drivers and fleets currently face. With the launch of the Zero Emissions Van Plan, presented to MPs last week, many would’ve expected further measures to be set that acknowledged electric van concerns. To futureproof the EV transition for commercial vehicles, the government should consider the removal of regulatory barriers for the largest electric vans and a review of public charging accessibility for vans using the Public Charge Point Regulations 2023.

Accessible and convenient charging infrastructure in the right areas is also essential. In the past 12 months, over 18,000 chargepoints have been added to the UK network, but how many are in pockets of the country that don’t currently have easy access? It’s crucial for fleets/drivers that these areas see an increase in charge point coverage to ensure safe and confident driving across the country.

As the EV transition continues, fleet managers and drivers have openly shared their concerns about electric vans, including higher pricing, limited ranges, reduced payloads, and inadequate public charging infrastructure. Operators need critical support to meet the 2030 ZEV target for vans, which is currently 70%. These issues considerably impact EV uptake, with electric van registrations consistently falling behind electric cars. SMMT data from 2023 revealed the electric van market share remained stagnant at 5.9%. Commercial fleet concerns should be a key focus, and overcoming these barriers will significantly boost business and driver confidence in the future of EVs.”

Leading manufacturer, Vauxhall, has echoed the disappointment in the Spring Budget

Vauxhall joined the chorus of criticism. Managing Director James Taylor expressed frustration, stating that the budget failed to provide the acceleration needed to prevent the stalling of the country’s shift to electric vehicles.

Taylor highlighted the discrepancy in incentives, noting that while there are strong incentives for company car drivers to embrace electric vehicles, private buyers seeking more affordable options receive no such benefits. 

Taylor commented:

“Today’s Spring Budget has not delivered the acceleration needed to stop the UK’s transition to electric vehicles from stalling. 

If we are to meet the rightly ambitious targets laid out in the Government’s Zero Emission Vehicle mandate (80% of all cars sold to be electric by 2030) then there needs to be incentives for private car buyers to make the switch to electric as there are in the majority of European nations. 

Whilst there are strong incentives for company car drivers to make the switch to electric – including for those choosing luxury vehicles – the private buyer who wants a more attainable small or family car receives nothing. 

 Furthermore, if you can charge your electric vehicle at home with off-street parking then you will pay 5% VAT on your electricity. If you don’t have a driveway and rely on public chargers then you will pay 20% VAT on your electricity. We support the FairCharge campaign for a fairer taxation on charging. 

We would call on the Chancellor to urgently set up purchase incentives to stimulate the electric vehicle market and review the unfair taxation on public charging so that the UK isn’t left behind in the race to more sustainable motoring.”

Auto Trader UK was a key player in the call for EV action in the Spring Budget

Ian Plummer, commercial director at Auto Trader, joined the commentary. He put the significance of the Budget’s fuel duty freeze into perspective. Furthermore, he echoed the frustration over the Chancellor’s missed opportunity to reduce VAT on charging. Auto Trader was instrumental in an open letter to the Chancellor, calling on increased incentives for industry improvement.

Ian Plummer stated:

“Fuel duty has been frozen every year since 2011, so no self-respecting Chancellor would ever shoot himself in the foot by raising it in an election year.

“Drivers may avoid higher pump prices for now, but the freeze does send yet more mixed messages to any motorists tempted to switch to electric vehicles.

“Equalising VAT across public and private EV charging points would encourage people to make the switch, and for a fraction of the £6bn cost of freezing fuel duty, so today is a missed opportunity to support the green transition.”

Fiat UK shares the industry’s concerns, and explains the doubts it casts on the UK’s ZEV Mandate

Fiat UK managing director Damien Dally said while the fuel duty measures will be welcome news to motorists, it’s estimated the cost to the Treasury will be around £5 billion to implement. Instead, it could have implemented the rise and ringfenced that money to invest in the UK’s “seemingly dwindling” electric vehicle strategy.

Dally continued:

“The Government has set the direction of travel by enforcing the Zero Emission Vehicle (ZEV) Mandate and Net Zero target but is doing nothing to incentivise private (retail) customers to drive electric vehicles.  

The numbers don’t lie; private sales account for fewer than one in five electric car registrations in 2024 – and the overall market share is way below the 22% mandated by the government as part of the ZEV Mandate. 

The demand for electric vehicles is waning and we are sleepwalking into an electric vehicle crisis. The Government is also potentially putting its Net Zero target at risk.”  

As frustration continues to roll in over the UK’s Spring Budget, one thing is clear. The government is not doing enough to encourage EV adoption. The ZEV Mandate places the onus on manufacturers and dealers to increase adoption. This approach does not offer enough support. To hit its green targets, and push for equitable, sustainable transport across the nation, the UK government must step up to the plate. 

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