CEO Update

The clock’s ticking to help consumers go electric

05 April 2024 #CEO Update

Britain’s new car market grew for the 20th consecutive month in March, according to new SMMT figures published yesterday as the new numberplate helped attract buyers into showrooms. The importance of the month as a bellwether for the year to come cannot be understated and what it tells us is that while the overall market appears robust, more needs to be done to get private retail demand back on track. Low economic growth, weak consumer confidence and high interest rates make it more challenging for consumers to invest in new technologies and, given a full market transition needs the confidence of all motorists, making it more affordable across the board – not just for fleets and businesses – must be the priority.

This will come at a cost and industry has already made huge investments in innovative vehicles to meet our green targets – more recently with generous discounts to tempt buyers, but this is not sustainable indefinitely. We need more – sensible incentives sending the signal that the time to buy is now, helping more motorists invest and stimulating demand. There are cost effective ways to do this. For example, a temporary halving of VAT on new EVs for three years would save the average EV buyer around £4,000 off the upfront purchase price, while costing the Treasury less than the Plug-in Car Grant. At the same time, charging anxiety remains one of the single biggest barriers to mass EV adoption, and the need to ramp up public chargepoint provision while reconsidering VAT on their use – currently four times more expensive – continues to present a huge opportunity to encourage more motorists to switch.

The specific needs of the van sector must also be prioritised given its similarly ambitious net zero targets and, in good news, SMMT’s latest figures show more fleets went green in March than in any other new numberplate month to date. However, at just 5.5% of the market, there’s a long way to go to deliver on ambitions. With tough mandatory sales targets, maintaining existing purchase incentives is essential for UK operators, putting them on an even footing with operators in other major European markets. Just as important is delivering van-suitable public charging infrastructure, given these vehicles’ unique size requirements, and charging anxiety is felt particularly acutely by businesses seeking commercial viability.

These are just some of the topics to be discussed at SMMT’s International Automotive Summit in June, one of the UK industry’s most high-profile corporate events focusing on the core issues of Britain’s global competitiveness, our markets, technology and people. Tickets are now on sale and you can book yours here.

Update Newsletter