Car News Updated Hourly

Inside the battle to recharge Britain’s slowing electric car market

ev market share

ev market share

When Rishi Sunak delayed the UK’s ban on new petrol car sales, he was at pains to stress it should be consumers, not the Government, who drive the switch to electric vehicles.

Yet since his remarks, car industry insiders have become increasingly frustrated at what many see as mixed messages emerging from Downing Street.

Despite pushing back the petrol car ban, the Prime Minister left in place targets that will force manufacturers to rapidly ramp up EV sales anyway from this year.

“In terms of messaging, it was slightly peculiar,” says Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT).

It is this confusion that is partly being blamed for the slow-motion car crash now unfolding in EV sales, with industry figures published on Monday showing that their market share slipped from 19.7pc in December to just 14.7pc in January.

That was after annual figures showed the proportion of car sales that were electric slipped from 16.6pc in 2022 to 16.5pc in 2023, the first time the EV segment has gone into reverse.

The malaise is sending shockwaves through the car industry at a time when manufacturers are already grappling with a string of other headaches.

Among the problems facing carmakers include poor charging infrastructure and high interest rates, which have pushed up the cost of financing deals.

A House of Lords report released on Tuesday urges ministers to grab the wheel and swerve to avert disaster.

“If we’re going to get to net zero in 2050, we’ve got to address surface transport, because that accounts for 23pc of our emissions,” says Baroness Parminter, chairman of the environment and climate change committee.

“And if the Government is serious about meeting its targets, then it needs to use all the levers at its disposal.

“The message the public got from the delay in the [petrol car] ban was ‘This is not something that we need to worry about now’.”

Sunak’s net zero speech emphasised the high upfront cost of EVs, but ministers have done little to address the issue since then.

Manufacturers argue the Prime Minister has in fact made things worse by withdrawing benefits for EV drivers.

The “plug in grant” for EVs previously allowed drivers to knock £2,500 off the price of their purchase but was withdrawn in June 2022, for example, while from March 2025 EV drivers will lose their current exemption from paying vehicle excise duty (more commonly known as road tax).

At the same time, the Government is tightening the screws on car manufacturers through the so-called Zero Emission Vehicle (ZEV) mandate.

This requires 22pc of new cars sold this year to be ZEVs, rising to 28pc in 2025, 52pc in 2028 and 80pc by 2030. Manufacturers who fail to meet the targets must pay fines or cover shortfalls through an emissions trading scheme.

Hawes, at the SMMT, says this mixed bag of policies is stimulating supply while doing too little to boost demand.

“We’re moving from the early adopter phase to the mass market phase,” he says, “and if you are to achieve net zero, this must be a mass market technology. It can’t just be for those who are most keen.

“So the decision to turn off the incentives does look like it was taken too early.”

Other issues that have plagued EVs include a rapid fall in values and huge insurance premiums, pushing up running costs for drivers.

Research from Auto Trader this month found that a motorist buying a £50,000 electric car could expect to lose £24,000 in value over three years, while a similarly priced petrol car would lose only £17,000.

The dramatic falls have coincided with falls in the price of petrol and an easing of EV shortages.

Meanwhile, data from insurance broker Howden Group recently revealed the typical insurance premium for an electric vehicle had increased to £1,344, compared with £676 for a petrol-fuelled car.

Insurers blame the discrepancy on data showing that EV owners claim more often and for higher sums, largely due to the higher repair costs for electric cars. They are also wary of the risk that cars may need to be written off completely if the battery – the most valuable component by far – becomes irreparably damaged.

Manufacturers argue that insurers are being too risk-averse and that in many cases batteries can be repaired, while some brands are switching to more modular battery packs that mean the whole thing need not be replaced.

But the issues underline why Hertz, the rental car giant that had intended to buy 100,000 Tesla EVs, announced a few weeks ago that it was scaling back its plans to go electric and selling some 20,000 vehicles it had already purchased.

Another totemic issue, as the House of Lords report notes, is the uneven distribution of charging infrastructure, leading to “charge anxiety”.

In this context, the Government’s failure to ensure there were at least six rapid EV chargers at every motorway service station by the end of last year is particularly symbolic, says Baroness Parminter.

“If the public don’t see that those charge points are going in, that is going to be a real barrier when people are thinking ‘why should I buy an EV?’”, she says.

The Lords’ report prescribes a series of measures to get EV uptake back on track.

For a start, though they do not recommend a specific method, the committee says the Government must go back to offering EV buyers incentives and that it should continue to do so, until there is greater parity with petrol cars in terms of price.

Britain is an outlier in having withdrawn support so soon, they argue, with the tax benefits of adopting an EV far higher in countries including Germany, Ireland, Sweden, Denmark, Norway and even Romania.

They say this could partly be addressed by equalising the VAT levied on people who charge at home compared to those who use public charge points, with the latter currently paying more.

At the same time, the SMMT wants Jeremy Hunt, the Chancellor, to halve VAT on private EV purchases to 10pc at his Budget on March 6.

The lobby group says the move, amounting to a subsidy of £4,000 per purchase, would stimulate an extra 250,000 sales by 2026 at a cost of £7.7bn.

Peers are also calling on ministers to “turbo-charge the charging infrastructure rollout”, by clearing planning blockages and ensuring that charging locations which are uneconomic for private companies are developed by local authorities.

They also say councils should be required to draw up EV charging strategies which ensure a ratio of no more than 50 cars to every charge point locally.

“Those are all within the Government’s gift,” argues Baroness Parminter.

“You can take a horse to water, but you can’t force it to drink. And that’s what the Government has now got to do – it has got to start helping consumers to understand and to help them be able to purchase EVs.”

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.

This article was originally published by a finance.yahoo.com . Read the Original article here. .

Subscribe To Our Email List

If you ain't first, you're last! Join to get the latest updates and exclusive offers!

Welcome to the club!

Something went wrong.