Cars Car makers call on Chancellor to remove VAT from electric cars
Is time running out for Japan's car industry?
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Electric cars and plug-in hybrids should be exempt from VAT to help stimulate their growth, according to the body which represents car makers in the UK.
The Society of Motor Manufacturers and Traders (SMMT) has urged the Chancellor, Rishi Sunak, to remove the tax from zero-emissions capable vehicles in his Budget next week to make them more affordable.
It argues that by cutting VAT from(EVs), plug-in hybrids (PHEVs) and hydrogen fuel cell cars (FCEVs), the average price would immediately drop by around £5,600.
New car registrations fell by 2.9 per cent in February and while EV and PHEV registrations were both up the SMMT argues that they still represent a tiny portion of the market and more needs to be done to accelerate their uptake.
Winners and losers in the 2019 UK car market
Our end of year report reveals which car makers did well in the UK – and who could do betterAnother decline is expected in 2020, to 2.2m if the Brexit process goes relatively smoothly. If the chaos and indecision of 2019 gets worse in 2020, then a fall to 2.0m or below is entirely possible. For now, here's the good and bad news of 2019.
EV registrations were up 243 per cent, to 2,508, while PHEVs were up 50 per cent to 2,058. However, combined they still only account for 5.8 per cent of the market.
‘Time for a change of approach’
The SMMT’s chief executive Mike Hawes said that the Government needs to use incentives rather than punishments to encourage more drivers to switch to EVs and PHEVs.
He said: “To drive the transition to zero emission motoring, we need carrots, not sticks – as the evidence shows, talk of bans and penalties only means people hang on to their older, more polluting vehicles for longer.
“It’s time for a change of approach, which means encouraging the consumer to invest in the cleanest new car that best suits their needs. If that is to be electric, government must take bold action to make these vehicles more affordable and as convenient to recharge as their petrol and diesel equivalents are to refuel.”
Autocar's guide to what will happen in 2020
As part of our guide to the perfect motoring year, here are our predictions for what to expect from the automotive world in the next twelve monthsBut what about the things we don't know? The following might not be set in stone, but Autocar's writers have predicted what you can expect from the automotive industry in 2020.
Costs could fall by £10,000
More affordable EVs are coming to market but they remain significantly more expensive than petrol equivalents (Photo: Fiat)
The SMMT says that the upfront cost of EVs could be cut by as much as £10,000 if the Government takes “bold steps” to increase their attractiveness. It wants the plug-in car grant to be kept at its current £3,500 and to once again apply to plug-in hybrids as well as pure-electric cars. It is also calling for EVs and PHEVs to be exempt from VED (car tax) and insurance premium tax.
It claims that, based on current calculations, the removal of VAT could increase sales of EVs alone to just under one million by 2024 as the Government plans to.
But it says that any move to make EVs more accessible to more people must be matched by investment in infrastructure around the country
Mike Hawes added: “Next week’s Budget is the Chancellor’s opportunity to [show] that government is serious about delivering on its environmental ambitions. Industry has invested in the technology, with acoming to market in 2020, and we now need government to match this with a comprehensive package of incentives and infrastructure spending to accelerate demand.”
Japan's micro sports cars – Honda and Daihatsu kei cars driven .
Kei cars are big in Japan, but do they deliver driving thrills? We sample a pair in Tokyo to find outStorm Brian was the result. It’s a fine English name but perhaps lacking the gravitas of many of those coined overseas. “In terms of impact, we’ve had spray overtopping quaysides,” someone from the Environment Agency told the BBC of Brian’s pummelling of Cornwall. Top marks for not trying, Brian.
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