Five ways to persuade people to buy them- QHN

The government is facing a backlash from car manufacturers, who claim that current rules designed to promote electric vehicles are too harsh.

They say consumer demand for electric cars has fallen far short of what was expected, meaning they are struggling to sell enough.

Ford insists this was a factor in its recent decision to cut 800 UK jobs.

Vauxhall’s owner Stellantis is to close its van-making plant in Luton – partly, it says, because of the new rules.

So what could be done to encourage more consumers to buy electric?

Electric vehicles (EVs) are generally more expensive to buy than their petrol or diesel equivalents. This is partly because they still represent a relatively small proportion of cars being built, so economies of scale – when the cost comes down the more you build – have not yet properly kicked in.

The government already offers some subsidies to make EVs cheaper. They attract a low rate of company car tax, for example. Salary sacrifice schemes allow workers to lease cars cheaply through their employers, using their untaxed income, which can offer significant savings.

But since the abolition of the plug-in grant for cars in 2022, there has not been a similar incentive for people who cannot get a car through their company. People within the industry believe that should change.

Automotive journalist Quentin Willson, who now fronts the campaign group FairCharge, thinks the government should consider “interest free loans on used electric vehicles for lower income drivers and halve the VAT on new cars”. This, he suggests, could be funded by abandoning the current freeze on fuel duty.

The price of electric cars is coming down, partly due to cheaper battery packs. Despite sharp fluctuations in the value of metals used to make them, such as lithium and cobalt, battery pack prices have fallen by about 70% since 2015.

This has helped reduce the price gap between electric and conventional cars. Earlier this year, Stellantis began offering the electric version of its Frontera model at the same price as the petrol hybrid model.

However, that doesn’t mean it is easy to find a low-budget electric car. There is a shortage of truly cheap options on the market.

That is partly because a number of manufacturers have preferred to focus on more expensive and potentially more profitable models. But as Roger Atkins, founder of the Electric Vehicles Outlook consultancy, puts it, “cars that cost £50,000 to £60,000 are not the kind of cars everyone can buy”.

However, change is around the corner. The Dacia Spring went on sale in the UK a few weeks ago, with a starting price of £14,995. The newly launched Leapmotor T03 costs very little more, while Chinese giant BYD has said it will bring a version of its super-budget Seagull model to the UK next year.

The government says the sale of new petrol and diesel cars will be banned in 2030 – but will it?

Plans to force conventional cars off the market were originally meant to take effect in 2040, under plans introduced by Theresa May’s government. But the target was brought forward to 2030 under Boris Johnson, then delayed to 2035 under Rishi Sunak.

People within the industry claim the changing target has sent out mixed messages and confused consumers, leading some people to delay buying an electric car until the situation becomes clearer.

According to Melanie Shufflebotham, co-founder of electric charging guide Zapmap, many drivers are “confused about dates, concerned on costs and have questions about charging.” She says “a consistent factual communication programme” is needed, supported by government.

Although the cost of using public charging points can vary widely depending on the provider and the charging speed you choose, public chargers are usually more expensive than charging at home.

This is partly due to tax. An EV owner charging a car on their drive will pay 5% VAT on the electricity they consume. But if they use a public charger they will pay 20%. People who are unable to charge at home are left with no choice but to pay the higher rate.

The industry, EV advocates and even a House of Lords committee have called for the public rate to be reduced to 5%

Consultant Roger Atkins claims the current policy is “divisive”, because it “favours better-off people who can charge at home on their driveways”.

Read any survey of potential buyers’ attitudes towards electric cars, and concerns about charging infrastructure will be at or near the top. People worry about whether they will be able to find a charger at a busy service station, or in a rural area.

The number of charging points is growing. According to ZapMap, as of October this year, there were 71,459 charging points across the UK, at 36,060 locations. This was a 38% increase on the year before.

But not everyone is happy. Complaints from existing owners struggling to find a charging point, having to queue for a long time or arriving to find it broken are not hard to find.

As more EVs come onto the roads, many more charging points will be needed. The government wants 300,000 in place by 2030 – but the current rate of expansion is not fast enough to reach it.

Part of the blame appears to lie with local authorities, who are responsible for granting planning permission for new rapid charging hubs. According to Roger Atkins, the process simply takes too long.

Simon Smith, of charging firm Instavolt agrees that red tape is a problem. He thinks that difficulties getting grid connections for rapid charging stations is also a “critical barrier” to expanding the network.

“We need greater support to address planning delays, local council resistance and grid connectivity challenges”, he says.