The Society of Motor Manufacturers and Traders (SMMT) released a report highlighting the achievement of one million electric vehicles (EVs) in the UK, emphasizing the lack of government incentives for consumers in reaching this milestone. The report advocates for the implementation of incentives, such as reducing value-added taxes (VAT) on battery electric vehicle (BEV) purchases, to expedite the transition to zero-emission cars. According to SMMT CEO Mike Hawes, the market growth currently relies on businesses and fleets, signifying the need for consumer-focused policies to further drive EV sales.
The report states that the new car market as a whole experienced an 8.2 percent growth in January, with BEVs accounting for 20,935 vehicles, representing a 21 percent year-over-year increase. The organization anticipates that BEVs could constitute one-fifth of all car purchases in 2024, projecting a total of two million BEVs within the next two years if the government incorporates incentives in its upcoming budget. SMMT urges the government to temporarily reduce VAT for private EV buyers to facilitate the transition and support net-zero goals.
By cutting the VAT on new BEVs, the report estimates a cost of £1,125 (~$1,410) per car to the Treasury, highlighting its affordability compared to previous plug-in car grants. SMMT anticipates that this initiative could put over a quarter of a million additional BEVs on the road by 2026, leading to a reduction of more than five million tonnes of CO2. Furthermore, the report emphasizes that implementing these measures would contribute to achieving two million BEVs in the next two years.
The organization’s data also reveals an increase in Tesla’s overall market share from 0.44 percent in January 2023 to 1.11 percent, regardless of powertrain. The next UK parliament budget, scheduled for March 6, presents an opportunity for the government to enact policies that support private EV buyers and accelerate the transition to electric vehicles.