9:09 am, February 6, 2024
Financial incentives to entice consumers into new and used electric vehicles are needed now if the government is to hit its targets.
That’s the opinion of Baroness Parminter, chair of an inquiry into the state of the electric vehicle market in England and Wales.
Speaking to Car Dealer on the eve of the publication of the committee’s report titled EV Strategy: Rapid Recharge Needed, Baroness Parminter – who drives a Nissan Leaf herself – said she would like to see the government put in place financial incentives to help boost the uptake of EVs ‘immediately’.
She said: ‘If there was a commitment to immediately consult on the necessary fiscal incentives for both new cars and secondhand cars, that would be a win.
‘And in the Budget saying we will equalise VAT on home and public charging, that would be a massive signal of intent.
‘And that’s what we need from this government because the messages have been mixed.
‘When Rishi Sunak rolled back on the deadline last year he used the term “getting to net zero is going to be hard” – that’s not what the public needs to hear.
‘They need to see the government putting some skin in the game on this now. And the VAT equalisation in the Budget would do that. There needs to be some clear communication from the government that we’re all in this together.’
The report – published today – suggests boosting used electric car sales with a ‘battery health standard’, reforming vehicle tax so consumers know where they’ll stand in the future if they buy an EV and reducing the VAT rate for public charging to 5%, among a number of other ideas.
Baroness Parminter added: ‘If we don’t incentivise used [electric] cars then we are not going to crack this market given how many cars are bought in the used market.
‘I think the government needs to learn the lessons from other schemes [in other countries] which are working, which are incentivising the second hand market. And we’ve said, absolutely, the government should be looking at fiscal incentives, whether it’s loans or grants, that’s a matter for them. And it needs to be doing that now.
‘In the past, when we had the plug-in car grant, it was across all cars. What we are saying is that we need to target the affordable end of the market for fairness issues.
‘That’s where we need people to be buying the cars. We’re asking the government to look at effectively reintroducing grants, but to target them at the lower end of the market.’
The report also suggests solutions around promoting the life of EV batteries in used cars and showcasing how ‘healthy’ they still are.
She added: ‘We think it’s absolutely critical that the government introduces a battery health indicator for EV batteries. Otherwise, I think that will be a major brake on people thinking that they’ll buy second hand electric cars.’
Baroness Parminter and her inquiry heard evidence from August 2023 onwards from car manufacturers, suppliers, charging infrastructure firms, the general public and car dealers.
She warned the government that if it doesn’t heed the inquiry’s advice, hitting its targets will be near impossible.
She added: ‘I think if they don’t take on the main recommendations that we are proposing, I think the chances of us meeting those net zero targets are slim.
‘If we don’t get the EV revolution in place, we’re not going to hit our legally binding Net Zero targets by 2050. So the government needs to take what we’re saying really seriously.’
Baroness Parminter also explained that she found the fact consumers were less worried about ‘range anxiety’ and more concerned about charging infrastructure the most shocking.
She added: ‘The second thing that shocked me was the whole issue around VAT and the discrepancy between the amount you get charged for electricity if you’re able to charge from home and that which you get charged, if you’re charging at a public site.
‘Given that 40% of people aren’t going to be able to have home charging facilities that, for me, was a big issue, which I don’t think has been explored sufficiently. That was something that really struck home to committee members.’
And asked if she thought the government would listen to the inquiry’s advice, Baroness Parminter added: ‘I’m hesitant. The mood music as we move towards the General Election, where green issues by the Conservatives are being increasingly portrayed as a wedge issue makes me feel that this might make it harder for our messages to land.’
