The supply of new electric vehicles (EVs) to UK dealers is under threat due to a lack of financial incentives, when compared to other European Countries.
Auto Trader warns that car makers could choose to focus on countries where EV sales are more cost effective like France and Germany, where Government support is up to three times higher.
Ian Plummer, Auto Trader’s commercial director, said: “The Government’s current approach of reaching for sticks instead of carrots could have serious consequences for mass EV adoption.
“The UK has set an ambitious target for the widespread use of electric vehicles, but the incentives in place to help drive this change are anything but! The subsidies on offer do little to address the significant cost barrier preventing many drivers from making the switch.
“This coupled with the decision to favour regulation over incentives could compound the problem by encouraging manufacturer investment elsewhere in Europe.
“Ministers must seize the opportunity to put this right, if the UK is to have any hope of meeting its 2030 deadline. Increasing the UK’s subsidies will help to eradicate the cost barrier for many hardworking families, stimulating the demand needed to make the country’s automotive market competitive and attractive for car makers.”
EV grants being offered to consumers in Europe are three times greater than those available to Brits, with Germans being offered £5,000 more on average than motorists in the UK.
Most European countries have set less ambitious targets than the UK for the end of petrol and diesel sales, yet the measures they have put in place to drive EV adoption are more substantial, which will help to make EVs more affordable, according to Auto Trader.
While more EVs are being introduced into the UK, there are just four priced below £20,000 at present, all of which are either superminis or city cars. Many EV’s are currently £10,000 more expensive than a petrol or diesel equivalent, and with 38% of consumers recently stating, in a survey conducted by Auto Trader, that the upfront costs for electric cars was a key barrier to entry, this poses a significant problem for mass adoption.
The Smart EQ ForTwo (pictured) is the cheapest EV currently on sale, priced at £19,200.
These upfront cost concerns are likely why interest in EVs currently comes almost exclusively from the UK’s wealthiest postcodes. Six of the top 10 EV hotspots are to be found in affluent areas of London, including Putney and Kensington. Compared with the car buying average, those with the highest interest in making the switch to electric are twice as likely to have a household income of £75k or more.
The Government has an aim of phasing out internal combustion engines by 2030, but the already limited financial incentives have recently been reduced and will be withdrawn before being given the opportunity to truly take effect. In December, the Government cut the Plug-in Car grant from £2,500 to £1,500 and the value of vehicles eligible for the funding assistance reduced from £35,000 to £32,000. The scheme is due to end in 2023, and the benefit-in-kind tax break for company car drivers set to stop in 2025.
The changes fly in the face of calls from the Society of Motor Manufacturers and Traders (SMMT) which wants increased support for potential EV buyers in a subsidised model that might reflect successful schemes operated in Norway and Germany.