Drivers believe scrapping VAT on electric cars is the best way to encourage uptake of zero-emission vehicles, according to the AA. The motoring organisation’s study of more than 14,000 people found two-thirds of respondents thought dropping the tax would be “the most influential policy to help drivers buy an electric vehicle (EV).
However, while 66 percent of those quizzed said a VAT break would be the most appealing incentive, almost as many said they would like to see improvements to charging infrastructure. Some 64 percent of respondents said they thought increasing the number of rapid charging connectors to over 25,000 would encourage uptake.
Other popular methods of incentivising battery-powered vehicles included a government-subsidised scrappage scheme, favoured by almost six in 10 respondents (57 percent), and free electric car parking in council owned car parks – a measure just under half (49 percent) would be effective. A similar proportion – 47 percent – said they would like to see the government remove VAT on leasing costs for electric vehicles.
With those results in mind, the AA has called on the government to cut VAT for electric vehicles in the autumn budget. Chancellor Rishi Sunak is expected to announce the autumn statement in November, where he will set out the government’s spending plans for the winter and beyond.
According to the AA’s president, Edmund King, the budget represents an opportunity for the chancellor to “give customers confidence”. Such a move might also help reverse recent industry predictions suggesting EVs will not outsell petrol- and diesel-powered cars until 2028 given current incentives.
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“If the Prime Minister is to meet the nation’s decarbonisation and net zero [carbon emissions] targets, then the government needs to go all-in for electric vehicles,” said King. “Many drivers still feel priced out of the electric car market, so more has to be done to encourage their uptake. Scrapping VAT, as happened in Norway, is the best way to accelerate their growth and give consumers confidence.
“As the UK’s number one motoring organisation for electric cars, we know urgent action is needed to help decarbonise the UK car parc. Removing VAT on EVs at the budget will not only give the motor trade a jump start, but should help power up the electric car revolution. Giving the EV market a jump start will not just boost UK car manufacturing, but will also help reduce CO2 across the country and create new high skilled, high paid jobs in battery innovation. As the UK looks to ‘level up’, we urge the prime minister and the chancellor to act positively.”