Car makers call for EV tax cuts in March Budget to help drive green transition
Car makers have called on the UK government to implement a raft of tax cuts in the March Budget to help support the transition to electric vehicles.
The Society of Motor Manufacturers and Traders (SMMT) said today that the upcoming budget – which will be announced on 15 March – is a good opportunity to support electric vehicles (EVs).
“The industry and market are in transition, but fragile due to a challenging economic outlook, rising living costs and consumer anxiety over new technology,” said SMMT’s chief executive Mike Hawes.
“We look to a budget that will reaffirm the commitment to net zero and provide measures that drive green growth for the sector and the nation,” Hawes said.
According to manufacturers, ministers should cut VAT on public chargers from the current 20 per cent to 5 per cent and review the decision to introduce vehicle excise duty (VED) for electric cars from 2025.
Announced last November as part of the government’s Autumn Budget, the VED decision was criticised by car makers like Nissan as they said it would slow down the uptake of electric cars.
“While it is right that all drivers pay their fair share, existing plans would unfairly penalise those making the switch, and risk disincentivising the market at the time when EV uptake should be encouraged,” the SMMT said.
The remarks come as the UK’s car output increased for the sixth consecutive month, going up 14.7 per cent in January to 132,000 units.
The increase – which represents the highest start to the year since January 2020 – was mainly driven by EVs. Hybrids represented 14.4 per cent of new registrations, while battery-electric cars took a 13.1 per cent share of the pie.
A Treasury spokesperson said: “Since 2020, the number of new EV registrations increased by 76 per cent and we continue to invest £2.5bn to help encourage uptake, and fund the rollout of charging infrastructure across the UK.”