CEO Update

March can spring new life into EV market

23 February 2024 #CEO Update

Yesterday’s announcement of new electric van production in Luton from 2025 is yet another vote of confidence in the UK automotive sector, adding to the massive £23.7 billion commitment last year that will benefit our skilled workers, productivity and net zero targets. Given our world-leading decarbonisation timeline requires further investment in the years ahead, Britain must remain a globally competitive location for businesses – and that, as a minimum, means ensuring investor certainty, economic stability and a vibrant market. Support is crucial, therefore, not just for industry but for operators and consumers alike.

Sense also prevailed this week with the speedy reversal of HMRC’s decision to class double cab pick-ups as cars for tax purposes – an essential u-turn as the original decision would have meant vital sectors like construction and farming would be restricted from purchasing operation-critical vehicles. As the UK strives to move its zero emission vehicle (ZEV) market from early adopter to mass market, it’s more important than ever that a similarly sensible approach is applied to the car sector. Private retail appetite has been ebbing since the Plug-in Car Grant (PiCG) was withdrawn in 2022 and, with industry investing heavily, we’re now asking government to help consumers buy the very vehicles on which success depends.

The Spring Budget in less than a fortnight is the prime opportunity to establish a green fiscal policy that’s fit for the job. The single most effective measure, and one more affordable than the PiCG, is to temporarily halve VAT on new ZEVs from 20% to 10%. The legacy of such a measure would be enormous, putting an additional 270,000 EVs – rather than petrol or diesel – on the road and removing more than five million tonnes of CO2 over just three years. Ultimately, however, it would give consumers the same compelling incentives that fleets and businesses already enjoy. If private buyers are to join the journey to net zero, equal treatment is necessary.

Backing our ambition with action would send a clear signal not just to consumers but to global investors that we mean business. That’s a message we’ll be making loud and clear at SMMT Connected in London on 14 March, when industry and government leaders will discuss the latest challenges and solutions for automated and connected vehicles in the UK. Tickets are still on sale and you can book here.

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