SHOCK NEWS: Businesses TWICE as likely to buy an electric car as private buyers

The Society of Motor Manufacturers and Traders is calling for additional EV incentives for private buyers to match business incentives.

We’re on a headlong journey to all electric cars by 2030, but EV sales still account for only a very small percentage of new car sales in the UK.

The biggest obstacle for most is the cost of EVs, followed by stuff like range anxiety, and the cutting of the Plug-in Car Grant hasn’t helped, although as it’s still available for EVs costing under £35k it’s still a help for most.

Understandably, with the car industry barred from selling anything that doesn’t have a plug in less than nine years, the Society of Motor Manufacturers and Traders (SMMT) is calling for additional incentives for private buyers.

It seems they’ve realised – to no one’s great surprise – that businesses are buying twice as many EVs as private consumers. But there’s a reason.

Capital allowances of 100% allowing the full cost of EVs to be offset in year one for businesses, and the BIK rates for users at just 1 per cent this year for EVs mean a 40 per cent taxpayer with an £80k EV would pay just £320 in tax, whereas if the same taxpayer decided to have an £80k ICE car, with emissions greater than 170g/km, the tax bill would be £11,840. So a complete no-brainer to buy the EV for businesses and business users.

To correct the ‘imbalance’ the SMMT wants to see EVs exempt from VAT and a big increase in the charging network. Mike Hawes, SMMT CEO, said:

It’s clear this has been an electric revolution primarily for fleets, not families. Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come. To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning. We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location.

The SMMT reckon exempting EVs from VAT would increase take-up from private buyers by two-thirds by 2026. But it’s unlikely to happen.