Customers support Electric Car Grant, but VAT cut on charging preferred

Four in 10 buyers would consider purchasing a new EV following last week’s announcement of the Electric Car Grant, but most would have preferred the government to have lowered the rate of VAT on public charging.

Research of 1,000 car buying decision makers over the weekend found 38% of new car buyers think the grant will make them more likely to purchase a new EV as their next car.

This was evenly split between male and female buyers, rising to 65% of under 35s and 62% of those currently driving a hybrid.

However, most buyers (60%) said they would rather the government cut the VAT charged on public charging from 20% to 5%, the rate applied to domestic electricity, rather than introducing the grant aimed at new vehicles. 

Only 38% believe the grant is sufficient to make them consider buying a new EV before the 2028/29 tax year, when the scheme is due to end.

This was driven by those who currently own an EV (61%) or hybrid (53%).

However, the introduction of the grant appears to be stimulating EV consideration among used buyers, even though they will not benefit from it.

Overall 48% of buyers said the grant will make them more likely to buy an EV, with 32% of potential used EV buyers now more likely to make a purchase than before.

Lucy Tugby, marketing director of Motors, said: “The Electric Car Grant is a welcome move by the government but buyers remain cautious and uncertain about the details.

"With new EV buyers already benefitting from low APR finance and other incentives, our research shows consumers would have preferred the government to have lowered the VAT on public charging; a move which would have given a much needed stimulus to the used EV market.

“An unintended, but welcome, consequence of the Electric Car Grant, is the emergence of greater EV consideration with nearly half of buyers now thinking about purchasing an EV, including used car buyers who will not benefit under the scheme.”