Spring Budget includes funding for EV battery development
The chancellor has announced funding for “disruptive technologies” including development of electric vehicle batteries in the Spring Budget.
Philip Hammond pledged £270m to keep the UK at the forefront of “disruptive technologies like biotech, robotic systems and driverless vehicles”.
These technologies will be supported through the newly formed Industrial Strategy Challenge Fund (ISCF), which will support collaborations between business and the UK’s science base. The funding will cover an initial investment of £270m in 2017-18, which will include work in the development, design and manufacture of EV batteries.
Claire Evans, head of fleet consultancy at Zenith, said: “Increased range on new battery technology will speed their adoption by fleets.
“Research by the Society of Motor Manufacturers and Traders (SMMT), found that 51% of motorists would be more likely to buy an electric car for their low running costs, while 46% said that cheap or zero car tax would influence their decision.”
The Spring Budget also revealed plans to explore the tax treatment of diesel vehicles but made no changes to the current company car tax regime or the new VED system, which kicks in from 1 April.
In response, the British Vehicle Rental and Leasing Association (BVRLA) expressed disappointment over the lack of adoption of a more environmentally effective approach.
Chief executive Gerry Keaney said: “Mr Hammond’s first and last Spring Budget was the perfect opportunity to create a fairer, simpler tax system that incentivises the uptake of ultra-low emission vehicles. We are now left with company car tax and VED regimes that do little to support the Government’s green agenda or tackle the growing air quality crisis.
“At the moment, a 20% taxpayer choosing between a pure electric BMW i3 and a hybrid Mitsubishi Outlander – both of which have similar P11d values and sit in the same tax band – will pay the same company car tax over the next three years. The current regime provides no incentive to choose a pure electric vehicle until 2020. The BVRLA’s call for the Government to bring the introduction of the new 2% rate forward from 2020 to 2017 would incentivise drivers to choose cleaner cars now.”
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