UK's SMMT appeals to Chancellor for tax relief for EVs in next week's budget

by Lawrence Allan, Autocar UK 05 Mar 2020

The UK car market continued its declining trajectory in February as private car registrations dropped, figures released by the Society of Motor Manufacturers and Traders (SMMT) have revealed.

Registrations fell 2.9 percent year-on-year last month, and this is blamed on a significant 7.4 percent drop in demand for private buyers while fleet demand remained stable.

Some 79,594 models were registered, down 2741 from 2019. February is traditionally a quiet month for new car sales as buyers and sellers alike gear up for the March numberplate change.

Demand for diesel and petrol cars fell 27.1 percent and 7.3 percent respectively, with diesel down to just over a fifth of the overall market. Despite another month of growth for hybrids (up 71.9 percent) and battery electric vehicles (recording a three-fold rise), zero-emissions-capable cars still make up just 5.8 percent of the market. 

As a result, the SMMT is appealing to the Chancellor ahead of next week’s budget to offer tax relief to electric cars by removing VAT. It claims this move would reduce the average price of a family electric car by £5600/Rs 529,716.

It also reinstated its call for the continuation of the plug-in car grant - and its reintroduction for plug-in hybrids - to ensure cost parity with petrol and diesel cars. It claims that this, on top of a 'comprehensive package of incentives' alongside 'substantial' investment in charging infrastructure, would allow the Government to meet its zero-emissions ambitions. 

SMMT chief Mike Hawes said: “To drive the transition to zero-emissions 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. "

Eighth-generation Golf once again raises the bar for the family hatchback segment

He further adds, “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, the 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.”

February's best-selling models included the usual suspects, with a top five of the Mercedes-Benz A-Class, Vauxhall Corsa, Ford Focus, Ford Fiesta and - topping the charts with more than twice the registrations of the A-Class - outgoing Volkswagen Golf.