Drivers demand bigger grants or VAT cuts to help them go electric

Motorists believe the Government should introduce more financial incentives to encourage a switch to electric cars, with almost 80 per cent saying the cost is putting them off.

Suggestions range from increasing the existing plug-in car grant (PiCG) to cutting VAT or launching a money-back scrappage scheme as ways to make EVs more affordable.

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Research by the RAC has found that despite rising demand for them, 78 per cent of drivers think EVs are still too expensive compared to equivalent combustion-engined cars.

The cheapest EV currently on sale in the UK is the Smart EQ ForTwo, at £17,550 after the PiCG. A similar-sized Kia Picanto costs from £10,995. The MG ZS EV is £25,495 while a petrol-engined ZS is £15,495.

The RAC study found that nine per cent of drivers intend to buy an electric car the next time they change vehicles - up from six per cent in 2019 but still a small proportion of the car buying public.

Among those who are put off by the high purchase price, 53 per cent wanted to see a reduction or abolition of VAT on electric cars, which could knock thousands off the list price of models.

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Just under half (48 per cent) backed a scrappage scheme, similar to that run in 2009-10. Drivers would be given a discount on a new EV when they traded in an older more polluting car, which would then be scrapped.

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Fewer drivers supported enhancing the existing PiCG. Thirty per cent of drivers said they would like to see the Government add £1,000 to the current £3,000 grant.

Drivers also said that access to chargers was important in encouraging them to switch. An estimated one in three people does not have means to charge at home, leaving them reliant on public infrastructure.

Councils around the UK have said they intend to install fewer than 10,000 on-street chargers in the next four years but more than 40 per cent of motorists said they want the Government to set a binding national target for access to public charge points, such as ensuring 95 per cent of the population live no further than five miles from the nearest charger.

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RAC data insight spokesman Rod Dennis said: “The single biggest barrier to a driver choosing an electric car over one powered by petrol or diesel has to be cost. Although good finance leasing deals and offers such as free home charging for a set period can help, it appears to be the case that the price of many new EVs remains prohibitively high for a lot of people.

“If the Government really wants to stimulate demand for electric vehicles quickly, then it either has to boost the Plug-in Car Grant or remove, or cut, VAT for a fixed period of time. While removing VAT would lead to lower list prices, it would also cost the Government a lot more and may be more favourable to people choosing more expensive models. The current grant scheme is already in place so increasing it may be the easier option to implement.

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“A healthy market for new electric cars in the UK will also have another major benefit – it will mean more EVs make their way onto the second-hand market, improving affordability of zero-emission models for everyone.”