7:52 am, March 15, 2024
Vauxhall has called on the government to immediately cut VAT on new electric cars to 10% in a bid to boost sales.
In an open letter to prime minister Rishi Sunak, Vauxhall MD James Taylor has asked the government for assistance incentivising car buyers to switch to electric.
Writing in The Sun newspaper, Taylor said the Budget was ‘disappointing’ and a lack of incentives for private car buyers to turn to EVs is ‘suffocating’ the market.
As well as the cut in VAT, Taylor calls on the government to cut the rate of VAT charged on public charging to 5% and to make it easier for companies to install more chargers.
Taylor said: ‘What is going to make a difference and put the spark back into the transition to EVs? Make the switch as financially obvious for a private driver as it is for a company car driver (like in many other European countries) and reduce VAT on electric cars to 10%.’
Taylor warned that without action the UK will fall behind the rest of Europe at a time the government is mandating 22% of all car sales must be electric in 2024.
These stringent ZEV Mandate targets get increasingly tougher each year – more than half of all sales must be electric in just four years.
Taylor’s open letter is the latest sign manufacturers are getting increasingly concerned these tough targets will be impossible to hit without assistance.
The Vauxhall MD points out that company car drivers and fleets are making up the lion’s share of EV sales as there are incentives for them to buy.
Private EV buyers have so far accounted for just one in five sales so far in 2024, the SMMT reported earlier this month.
Taylor added: ‘The market is being driven by company car and business owners who benefit from very strong tax incentives to buy electric. We are fully behind supporting people to do the right thing.
‘But, the question to ask is whether it is right to still support someone with tens of thousands of savings in tax when buying a £100,000 luxury electric car, when the average private buyer gets nothing?
‘Imagine if those incentives were distributed differently and used to support sales of small and family electric cars to private buyers?
‘The more affordable the electric cars we sell today means even more Brits will be able to buy used versions tomorrow. That’s how it works.’
Taylor is the second Stellantis brand boss to call on the government to help boost EV sales in recent weeks.
At the launch of the electric Fiat 600e, the brand’s MD Damien Dally said it is ‘almost impossible’ to get private buyers into electric vehicles as ‘there seems nothing coming from the government’ to accelerate the take-up of battery-powered vehicles.
Dally also called on the government to reinstate the plug-in car grant for electric vehicles, which ended on June 14, 2022.
Car Dealer has contacted the government for comment.
