Auto manufacturers are projected to provide at least £2 billion in discounts for electric vehicles (EVs) this year, yet still fail to meet the UK government’s sales target, as per information from the industry’s trade union. Even with substantial price reductions, contributing to unprecedented battery-electric vehicle registrations in September, zero-emission vehicles barely met the government’s 22 per cent target for this year, reveals the Society of Motor Manufacturers and Traders (SMMT).
SMMT’s CEO, Mike Hawes, raised concerns about the industry’s inability to continually support the market with billion-pound investments, which could risk environmental goals and future investment. His sentiment echoes the worries of manufacturers like Stellantis and Ford who are critical of the UK’s efforts to accelerate the transition away from fossil fuel engines without sufficient government incentives.
Sales of battery-electric vehicles experienced a significant surge last month, registering a 25 per cent increase. In comparison, the overall market only saw a slight 1.1 per cent rise from the previous year. EVs constituted 20.5 per cent and 17.8 per cent of total sales in September and first nine months of the year, respectively.
The SMMT predicts EVs to make up around 18.5 per cent of total car sales this year. Fines up to £15,000 per vehicle are levied on automakers who do not conform to the UK mandate. However, they have the option of avoiding these penalties by purchasing credits from over-performing manufacturers. The UK government also plans to phase out sales of new gas and diesel cars by 2030.
The SMMT, along with the UK heads of car manufacturers such as Stellantis, Volkswagen and Nissan Motor, appealed for support to Chancellor Rachel Reeves before her budget later this month. Their letter again requests that the value-added tax on EV sales be reduced to 10 per cent for the next three years, among other measures.