The UK automotive industry is calling on the Government to reduce VAT on new electric vehicles to further encourage demand.
The Society of Motor Manufacturers and Traders (SMMT) has forecast that 1.782 million new EVs will be registered between 2025 and 2027, according to its In It Together: Why Every Sector Wins With EV Volume report. However, the SMMT argues that demand must still be stimulated to meet ZEV mandate targets.
It says that halving the amount of VAT when purchasing a new electric vehicle would raise demand by 15%, increasing EV sales by 267,000 over the next 2 years – bringing the total to 2.05 million new EVs.
The increased uptake by halving VAT would also lower CO2 emissions by six million tonnes a year, which is equivalent to cutting UK aviation emissions by almost a sixth.
Incentives could still be an important tool for encouraging UK motorists to make the switch to electric. EValuate, the latest initiative from Motor Assist, allows ICE drivers in need of a replacement vehicle following an incident to select an EV for a real-world extended experience, enabling them to see if making the switch permanently would be viable.
