Chancellor criticised for lack of support for electric vehicle sales in budget announcement

Despite mounting pressure from the automotive industry, the latest Budget failed to incorporate a proposed 50% reduction in VAT for electric cars, leaving many disappointed.

This measure, if implemented, could have significantly lowered the purchase price of electric vehicles (EVs), thereby fostering greater accessibility for both businesses and households.

Furthermore, the absence of an extension to the Plug-in Van Grant, currently set to expire on March 31, 2025, has raised concerns among fleet operators, potentially leading to a disruptive “cliff-edge” scenario for orders.

While the extension of the 5p per litre fuel duty reduction for another year was anticipated, industry experts argue that it has inadvertently narrowed the financial incentive for transitioning to electric vehicles, particularly amid surging energy costs.

Notably, the Budget overlooked addressing the disparity between VAT rates for public charging (20%) and home charging (5%), a move that could have alleviated the financial burden for drivers without access to off-street parking and fleet operators relying on mid-shift top-ups.

Charlie Jardine, CEO of EO Charging, expressed disappointment at the absence of a VAT cut on EVs, emphasizing its potential to stimulate EV uptake and contribute significantly to the government’s net-zero agenda. Jardine highlighted the stagnating sales of private EVs in the UK, underscoring the urgency for policy interventions to drive mass adoption.

He further emphasized the need for inclusive measures that extend beyond affluent private EV owners, advocating for grants for charging infrastructure and mandates for zero-emission bus fleets to ensure equitable access to the benefits of electrification, especially among lower-income individuals.

Jardine’s remarks underscore the global trend of governments implementing incentives and policies to promote EV adoption, urging the UK government to prioritize similar measures to avoid lagging behind international counterparts.

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