Government Support Could Increase EV Sales by 2 Million

Welcome, Net Zero News readers,

The automotive industry is urging the UK government to act swiftly in converting electric vehicle (EV) sceptics into enthusiastic adopters of cleaner transport options. The Society of Motor Manufacturers and Traders (SMMT) has recently released a new publication titled In It Together: Why Every Sector Wins with EV Volume, which highlights the significant benefits that increased EV adoption can bring not only to the automotive sector but also to various other industries.

This insightful report sheds light on the interconnectedness of the automotive industry with other sectors, illustrating how higher volumes of EVs can stimulate economic growth, promote cleaner mobility, and drive social change. By advocating for enhanced purchase incentives and supportive government measures, the SMMT believes that the market can expand significantly—potentially leading to the registration of two million new electric vehicles by 2028.

Current forecasts suggest that, under existing market conditions, approximately 1.782 million new EVs are expected to be registered between 2025 and 2027. However, the SMMT proposes that by introducing initiatives such as halving VAT on new EV purchases, demand could surge by an additional 15%. This would effectively add 267,000 more electric vehicles to the roads, raising total registrations to 2.05 million.

While such a reduction in VAT may initially impose a financial burden on the Treasury—averaging around £1,000 per vehicle—the report notes that the government has already benefitted from a £2.5 billion VAT revenue windfall over the past five years, thanks to the tenfold increase in EV uptake. This demonstrates the potential for long-term economic benefits from strategic investment in the EV market.

The proposed measures, alongside flexible regulations and a mandated rollout of chargepoints, are expected to create a more vibrant and environmentally friendly car market. This transformation could result in a reduction of CO2 emissions by six million tonnes annually—equivalent to cutting UK aviation emissions by nearly one-sixth—while simultaneously fostering economic growth across the nation.

A recent survey conducted by the SMMT, in collaboration with Censuswide, reveals that only 23.1% of prospective new car buyers plan to purchase an electric vehicle between now and 2028. This figure falls short of the government’s aspiration of achieving a 28% EV market share this year alone. The survey further indicates that nearly half (48.7%) of respondents are already driving electric vehicles, while just 11.6% of new buyers expressed a definitive intention to switch to an EV.

However, the SMMT posits that with the right government support, the landscape of the EV market could dramatically change. The combination of purchase incentives, a wider rollout of chargepoints, and reduced charging costs through VAT cuts could encourage approximately two in five consumers to make the switch to electric.

Mike Hawes, Chief Executive of the SMMT, commented on the current progress: “Manufacturer investment has meant ten times as many drivers are going electric compared with just five years ago. This is great progress, but with the right support for consumers, we can go beyond current expectations and put a total of more than two million new EVs on the road by 2028.”

He further emphasised the broader benefits of government investment in converting electric sceptics, stating, “This would energise business across the country far beyond just the automotive sector. Every stakeholder would benefit from the impact of consumer incentives, which, when combined with binding targets for chargepoint rollout and more flexible regulation, would create a virtuous circle of rising demand that stimulates green economic growth.”

As we move forward in the fight against climate change, it is essential for all sectors to collaborate in driving the uptake of electric vehicles. The automotive industry’s call for action is not just about cars; it is about creating a sustainable future that benefits everyone. By embracing electric vehicles, we can pave the way for a cleaner, greener Britain, where economic growth and environmental responsibility go hand in hand.

Let us continue to support initiatives that encourage the shift towards electric mobility, ensuring that both consumers and businesses can thrive in a sustainable economy. Together, we can champion the cause of net-zero emissions and work towards a future where electric vehicles are the norm, not the exception.