Chancellor ignores calls to support EV market
The chancellor has been accused of missing “a golden opportunity to incentivise electric cars” by not addressing fleet taxation anomalies in yesterday’s Budget.
Although the Government did announce that it would extend the first-year allowance for electric charge-points for four years, there was no announcement on bringing forward low tax bands for ULEVs to 2019/20, despite calls from leading firms that have highlighted how this could help drive ULEV uptake in line with government ambitions, including the Road to Zero Strategy.
Also missing was a much-anticipated announcement on how the transition to WLTP will be handled. Instead, the Government said it would “review the impact of WLTP on Vehicle Excise Duty (VED) and company car tax (CCT) to report in the spring”.
And there were no changes to this month’s announcement that grants for plug-in hybrids have now been cut under a reformed system focused on increasing uptake of electric and hydrogen fuel cell vehicles.
The Budget’s lack of reference to any early introduction for the 2% company car tax rate for electric vehicles has been criticised across the fleet and automotive industry.
BVRLA chief executive Gerry Keaney said: “The chancellor chose to ignore the overwhelming voice of fleets, motoring groups, business organisations, environmental groups and MPs – all of whom were united in calling for this simple tax measure to support the electric vehicle market.
“The Government has missed a golden opportunity to incentivise the most important market for electric cars and is in danger of undermining its own Road to Zero Strategy.”
David Brennan, CEO of Nexus Vehicle Rental, echoed his comments: “By failing to announce that the 2% tax rate for pure electric company vehicles has been brought forward, the Chancellor has contradicted his commitment to a cleaner future. As we are seeing increasing numbers of fleets turn to electric vehicles (EVs) to drive their businesses, this failure will prevent a speedier and more widespread uptake in ULEV – especially important following recent calls for the 2040 ban on new petrol and diesel vehicles to be brought forward to 2032 – which we feel is an already ambitious target.”
And ACFO chairman John Pryor also condemned the Plug-in Car Grant changes and the lack of action on bringing the 2% rate forwards.
“Those twin decisions will, ACFO believe, only serve to dampen fleets’ enthusiasm for ultra-low and zero emission cars, at least in the short term, at a time when the Government says it wants to drive out petrol and diesel engined vehicles from the UK car parc,” he said.