The forthcoming Spring Budget is a likelihood for Government to launch measures to spice up UK automotive industry focused largely on jumpstarting market demand for EVs.
Campaign group FairCharge is urging the Chancellor to make charging costs fairer in a bid to spice up electric vehicle adoption in Wednesday’s Budget by dropping the outdated, higher rates of VAT on public electric automobile charging.
Electric vehicle drivers who can charge at home pay just 5% VAT on their energy bill, but 38% of those without driveways are forced to make use of public chargers and pay the complete VAT rate of 20%. It said the value difference between home and public charging is now significant and acting as a barrier to EV adoption.
Auto Trader which has joined the campaign has calculated that drivers charging off peak at-home could save £865 annually in comparison with internal combustion engine vehicles, but that a driver using public rapid chargers would pay £264 more over a yr.
An open letter, delivered to Chancellor Jeremy Hunt by FairCharge, has been signed by energy provider E.ON, ChargeUK, Jaguar Land Rover, Stellantis, Polestar, Greenpeace, Transport & Environment, The Campaign for Higher Transport and Auto Trader which last yr cited the expense of public charging as a key barrier to 32% of motorists owning an electrical vehicle.
Certain charge point operators including E.ON have committed that any VAT cut would also provide a crucial profit to EV drivers and may very well be passed on to motorists almost immediately.
Quentin Willson, FairCharge founder, said: “If the Government is serious about wider EV adoption, they have to revisit this out-of-date VAT laws – written within the early Nineties before the arrival of electrical cars – and make it fit for purpose. The price to The Treasury could be very small in comparison with the a whole bunch of billions spent supporting fuel duty, however the profit to EV drivers without private parking and to urban air quality could be significant and take away this unnecessary barrier to EV adoption”
Dev Chana, managing director, E.ON Drive Infrastructure added: “Taxing EV drivers 4 times as much for using public chargers is effectively a tax on individuals who don’t have a driveway A fairer system which charges the identical rate of VAT wherever and each time you charge your electric automobile could be an actual consumer win during this cost-of-living crisis and would also help speed up EV adoption by taking away an unnecessary and unfair cost.”
Ian Plummer, industrial director at Auto Trader: “It is just unfair that EV owners without driveways should need to pay more for the privilege of improving air quality. Its time for the Treasury to handle this injustice and provides electric vehicles the most effective likelihood of widespread adoption, slightly than remaining the preserve of the rich.”
Incentivising consumers and increasing consumer confidence throughout the transition to electric through price incentives and improving electric charging infrastructure was also cited as one in every of the National Franchised Dealers Association (NFDA) key priorities.
“NFDA urges HM Treasury to support the automotive sector’s efforts to achieving the Government’s net-zero targets which the UK might want to unlock a long time of growth in cleaner road transport,” commented Sue Robinson, chief executive of the NFDA which represents automobile and industrial retailers across the UK.
The NFDA submitted its budget proposal to the Chancellor ahead of the 24 January submission deadline for consideration in preparation of the Spring Budget 2024.
The submission covered an array of areas affecting the automotive industry. Two further aspects from NFDA’s submission are prioritising investment and growth within the UK automotive sector and addressing the abilities shortages that the industry is currently facing together with reforming the apprenticeship levy.
“The upcoming Spring Budget in March looks more likely to be the last major fiscal event before a general election is named this yr,” said Robinson. “This provides an important opportunity for the Government to take heed to the concerns of automotive retailers and description its vision for the longer term of the sector.”
Last month, automobile maker Fiat renewed its call on the Government to reinstate its electric automobile grant to realize its 2030 goal of 80% electric vehicle (EV) sales. The Italian manufacturer of the favored Fiat 500e and recently launched Fiat 600e has prolonged its own £3,000 grant for purchasers, to point out its commitment to the Government’s targets.
Fiat UK managing director Damien Dally said: “More must be done. Consumers need further support to have a reason to make the switch to electric. The excellent news is the UK has now passed the a million electric vehicles landmark. Nonetheless, the electrical automobile market on this country is in real jeopardy. Private sales, versus business and fleets, are softening and that’s a trend that needs a collective effort to reverse.
“With the Spring Budget just across the corner, we’re urging the Government to reintroduce incentives for consumers or face stifling, and even undoing, all the nice work achieved up to now and risking endangering net zero climate targets. We’re doing our bit, but there’s only up to now we will go.”
The price of running a automobile is becoming unaffordable, sparking concern amongst motorists, based on latest research from Close Brothers Motor Finance. It said that despite optimism that the Government’s decision to delay the petrol and diesel ban to 2035 would give motorists more time to change to electric, soaring energy bills and the initial outlay are continuing to act as barriers. A fifth (22%) of motorists said they’ve decided against buying an electrical vehicle resulting from costs, and only 12% plan to buy one in the following yr.
From a producing perspective, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said that despite the positive begin to the yr for UK automobile production boded well, there may very well be no room for complacency, given economic headwinds and geopolitical tensions.
“There have to be a relentless commitment to competitiveness, constructing on the numerous recent investments into the sector. The forthcoming Budget is a likelihood for Government to just do that by introducing measures to spice up UK automotive manufacturing, focused on energy, investment competitiveness and market demand.”
Last week, it said a three-point plan of tax reform would recharge the EV market and speed up the UK’s progress towards net zero after latest research showed that rising numbers of would-be EV drivers at the moment are more likely to delay their switch to a battery electric automobile following last September’s decision to delay the UK’s end of sale of recent petrol and diesel cars and vans, from 2030 to 2035.
The Spring Budget also presented a pivotal moment for addressing the pressing concerns facing petrol retailers across the UK.
Gordon Balmer, executive director of the Petrol Retailers’ Association, said fuel duty had long been a key concern, providing relief to motorists amidst escalating living costs. “Temporary cuts and freezes have been welcome, offering relief amidst economic uncertainty. Nonetheless, the prospect of reversing these measures poses a threat, potentially aggravating the financial strain on consumers already grappling with volatile global energy prices.”
“The recent announcement from the Conservative Party about the usual business rate multiplier has raised concerns throughout the petrol retailing sector. With an impending increase on the horizon, petrol retailers are experiencing increased financial pressures. The proposed rise in business rates poses will only add to the growing list of costs increases that petrol retailers have needed to shoulder lately.”
This Article First Appeared At www.am-online.com
