This week Jeremy Hunt delivered a Spring Budget many anticipated to be the Conservative’s giant pitch to the country ahead of a General Election.
For Britain’s motorists, there was yet another fuel duty freeze confirmed with a planned 5p rise pencilled in for later in March axed. This is good news for petrol and diesel owners who are now entering their second year of battling high pump prices.
However, Wednesday’s Budget statement was more significant for what the Chancellor didn’t announce in the House of Commons.
Actually what Mr Hunt appeared to do is confirm a theme rumbling among many in the industry since last September when the petrol and diesel ban was pushed back from 2030 to 2035.
The question is simple. Are politicians now giving up on electric cars or do they expect drivers to transition regardless?
Yes, there was the not so insignificant £120million allocation to the Green Industries Growth Accelerator (GIGA) where EV development will certainly benefit.
But a lack of help for consumers at a time when private EV sales are beginning to flatline is a genuine concern for industry leaders, manufacturers and drivers who own electric models.
Ahead of the Budget, I was inundated with firms demanding an end to the so-called ‘pavement tax’ where EV owners are charged 20 percent VAT at public bays compared to just five percent at home.
Influential breakdown group the AA even called for a 15 percent reduction in VAT rates.
This was a major talking point in the run-up to Wednesday and this led to expectations that something would give, but nothing has changed.
The news left former Top Gear host and FairCharge founder Quentin Wilson “staggered” with the policy predicted to save electric car owners up to £1,300 every 10,000 miles.
Octopus Electric Vehicles has since called out the Chancellor for not giving a “critical” update on benefit-in-kind salary sacrifice rates past 2028.
These schemes have been one of the big success stories in getting EVs on the road and uncertainty only risks scuppering progress.
As private sales start to fall, fleets are the biggest market for EVs and the Chancellor should be keeping businesses on his side as best he can.
Meanwhile, in the run-up to Budget say, the Society of Motor Manufacturers and Traders (SMMT) claimed that halving VAT on new EV purchases would save the average buyer around £4,000 off the upfront purchase price.
However, no new incentives to get motorists to purchase electric cars were announced with all the previous giveaways set to end next year.
Paul Holland, Managing Director for UK/ANZ Fleet, FLEETCOR, made an interesting observation that the UK was on the path to following Norway.
The Baltic country saw a period of enthusiasm for EVs but sales slowed as incentives were rolled back with registrations falling as a result.
But, who I feel sorry for the most is those that made the leap to electric vehicles at the Government’s request only to be feeling the effects years on.
No real tax incentives from April 2025, no discounts on public charging bays and sky-high new and used prices raises the question. Is the EV bubble about to burst? Or has it already?
