Deloitte comments on reduction to plug-in vehicle grant scheme

Jamie Hamilton, head of electric vehicles at Deloitte:

“Electric vehicles have become an increasingly viable option for consumers, growing their UK market share to 11% in 2020. However, where similar incentives have been reduced in other countries, the sale of EVs subsequently fell.

“Today’s announcement is likely to impact on some sales but it is important to make clear that this isn’t the removal of all incentives. Others remain in certain parts of the market (sub £35,000) and in other forms, such as benefit in kind taxes. Likewise, there are significantly lower operating costs, such as fuel and maintenance, and investment in infrastructure also continues to support the rollout of EVs.

“Around half of new registrations are fleet and company cars so businesses now have a greater role to play. The value of benefit in kind for electric cars, and the opportunity to structure this through salary sacrifice, will continue to be the main driver of fleet sales, providing an ongoing financial incentive for businesses and their employees to switch. Crucially, many models still fall into the eligible price band.

“For personal purchases, a fully functioning used EV market will be important to maintain take up, particularly amongst cost conscious consumers. Brand new vehicles typically take three years to enter the used car market so incentives for this segment could prove beneficial.”

Ends

Notes to Editors

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