Despite the sales of battery electric vehicles hitting a milestone (500,000 low emission vehicles now on the UK roads), the grants for manufacturing have been cut by the government. But how will this affect the predicted rollout of electric vehicles?
With government plans to abolish the manufacturing of new petrol and diesel vehicles by 2030, it seems the cut to the BEV grant could affect the number of electric vehicles available. In March 2021, vehicle sales increased generally but dealers have seen a swing towards hybrids which comply with green air schemes, and appear to have come back into favour since the reduction in grants and the perpetual anxieties based around range for EVs.
It is estimated that “BEVs will account for 8.9 per cent of all registrations by year-end – down from the 9.3 per cent forecast in January. With PHEVs anticipated to take a 6.3 per cent market share, plug-in vehicles should comprise 15.2 per cent of all cars registered in 2021” (InsideEVs).
Could this impact leasing companies and consumers alike? The answer has to be yes. Some manufacturers are short of product, something which has not happened for years. That in turn affects the ability for leasing companies to source product.
Environmentally, these cuts could mean that petrol or hybrid vehicles will remain the first consumer choice. We will see the pace of reduction regarding carbon footprint starting to slow, too.
Legislative changes are struggling to keep pace. Many dealers have increased training needs as technicians move from combustion based training to that of high voltage EV.
Adoption of infrastructure
Less than 50% of UK businesses polled in Centrica Business Solutions’ research have adopted infrastructure for the move to EV, such as charging points. 46% of businesses plan to install these, while 37% already have.
The government should provide further grants and funding to businesses, and bring in legislation that will require such change, rather than the disparate local green air schemes that can be punitive for diesel commuters. Consumers need support both in terms of grants and the legislation to protect them when entering into finance or subscription agreements, which are now coming into sharp focus.
Together with countries such as Norway, the UK has a real opportunity to make cogent transformations to the towns and cities of the nation, with cleaner air and quieter roads. After the optimism delivered by the government whitepaper it is a false economy to reduce the grants and delay transformative legislation.
I’ll be following up on this topic in the weeks to come, given that our country’s economy is still in a process of levelling out from the pandemic. Will the government reverse the cuts to grants for EV vehicle development? In the meantime, if you’d like to discuss this subject or raise a general enquiry, please get in touch.
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Eddie works with a highly skilled team to deliver industry specific advice to the asset finance and leasing sector.