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New calls to the government to remove VAT on electric cars or increase subsidies to boost sales

Ministers should consider doing away with VAT on electric vehicles (EV) or increasing the incentives currently available to buy them, a market report said.

The RAC’s annual report on driving shows that demand for electric cars is slightly higher than a year ago, with less than one in ten drivers surveyed saying their next car will run on batteries.

The Motorists’ Group said the high initial cost of electric vehicles is the main obstacle preventing drivers from switching from their gasoline or diesel vehicles.

It has now urged the government to improve incentives for electric vehicle buyers, calling for the 20 percent tax to be abolished or for the existing £ 3,000 plug-in car subsidy to be increased.

VAT Scrap: The RAC has made new pleas for ministers to do more to boost electric car sales after discovering that less than 1 in 10 drivers intend to buy an electric car in addition

VAT Scrap: The RAC has made new pleas for ministers to do more to boost electric car sales after discovering that less than 1 in 10 drivers intend to buy an electric car in addition

The RAC questioned 3,000 drivers about their intention to buy a car and found that nine percent expressed a wish to buy an electric car with battery afterwards.

That was up from the six percent of people who claimed to be in the market for an electric car when the auto organization ran the same report a year ago.

Nearly eight in ten (78 percent) of those surveyed said that pure electric cars are still too expensive compared to similarly sized conventional vehicles.

The combination of high EV prices and the financial toll of the Covid-19 pandemic over the past year has increased the number of drivers planning to keep their gasoline and diesel vehicles longer than they intended in 2019.

In order to make zero-emission cars more affordable for consumers, ministers must seriously consider abolishing VAT.

More than half of the drivers surveyed said they were in favor of a reduction – or complete elimination – of VAT on battery-powered electric cars.

If the tax is removed, electric vehicle prices will fall by more than £ 5,000 on average.

This would significantly reduce the price difference between an electric model and a comparable petrol or diesel car.

VW's cheapest ID.3 hatchback starts at £ 29,990, including the government subsidy for plug-in vehicles

VW's cheapest ID.3 hatchback starts at £ 29,990, including the government subsidy for plug-in vehicles

VW’s cheapest ID.3 hatchback starts at £ 29,990, including the government subsidy for plug-in vehicles

The comparable size Volkwagen Golf Life - with petrol engine - costs from £ 23,355

The comparable size Volkwagen Golf Life - with petrol engine - costs from £ 23,355

The similarly sized Volkwagen Golf Life – with a petrol engine – costs from £ 23,355

EVs can cost up to £ 10,000 more than a comparable car with an internal combustion engine.

For example, Volkswagen’s ID.3 midsize hatchback currently starts from £ 29,990, including the plug-in premium.

That compares to the £ 23,355 cost of the entry-level petrol VW Golf, which is nearly identical in size to its electrified sibling.

Alternatively, EV pricing could be made more affordable by increasing the value of the taxpayer-funded Plug-in Car Grant by £ 1,000 to £ 4,000, the RAC said.

Ministers have come under a wave of criticism in recent years for gradually cutting the subsidy available to electric car buyers at a time when the government is most pushing motorists to switch.

When launched in 2011, the grant delivered up to £ 5,000 off the price of a new 100 percent electric car or plug-in hybrid model.

However, this was cut to £ 4,500 and then cut back to £ 3,500 in October 2018 as the government wanted to limit the stimulus.

It was last reduced to £ 3,000 – adding the caveat that it will only be available to buyers of EVs priced below £ 50,000 – in the March 2020 budget, when the grant was confirmed until 2023 would stay.

The report found skepticism about the range of electric cars, with drivers claiming they wanted to be able to drive 375 miles before considering getting out of their internal combustion engines.

The report found skepticism about the range of electric cars, with drivers claiming they wanted to be able to drive 375 miles before considering getting out of their internal combustion engines.

The report found skepticism about the range of electric cars, with drivers claiming they wanted to be able to drive 375 miles before considering getting out of their internal combustion engines.

Nearly half (48 percent) of the drivers surveyed by the RAC also called for the introduction of a scrapping scheme, in which customers would be financially incentivized to exchange their polluting gasoline and diesel vehicles for a zero-emission vehicle.

Separately, drivers also want assurance that they can easily charge these vehicles when they are not at home, with more than two in five drivers (43 percent) demanding a binding national target for access to public charging points – such as ensuring that 95 percent of the population lives no more than five miles from the nearest unit.

The report also highlighted ongoing skepticism about the driving distances available with electric cars, with drivers claiming they wanted to travel at least 375 miles in an electric car before considering getting out of their internal combustion engines.

This would be enough driving range to travel from Cambridge to Edinburgh on a single charge.

The poll came as the government deepened its plans to ban the sale of new gasoline and diesel cars by 2030, with the phasing out of hybrids five years later.

The move is expected to result in a surge in demand for the cleanest vehicles, already sold in record numbers in the UK.

Last year, 108,205 purely electric cars were sold in Great Britain, almost three times as many as the year before.

However, they still make up only 6.6 percent of new cars.

Commenting on this week’s report, RAC spokesperson Rod Dennis said: “The biggest barrier for a driver to choose an electric car over a petrol or diesel car has to be price.

While good finance leases and offers such as free home charging for a period of time can help, it seems that the price of many new electric vehicles remains prohibitively high for many people, with most drivers eager to see more. financial aid from the government. ‘

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