11 March 2020
Michael Woodward, UK automotive lead at Deloitte, comments on investment in the UK’s EV charging infrastructure:
“With the UK on the cusp of large scale adoption of electric vehicles, the Chancellor has today announced a £500million investment package to support the roll-out of a fast charging network.
“Our most recent research shows that access to charging is the number one barrier in stopping consumers switching to electric. Whilst a good start has been made, more investment will be needed in order to fully prepare for the anticipated growth in demand for electric over the next ten years.
“As well as providing investment, additional guidance is now needed to lead the way in providing a more joined up, long term strategy around charging infrastructure. This will no doubt include providing incentives for private companies to invest in it.”
Financial incentives for Electric Vehicles
“The decision to extend the plug-in car grant to 2022-23 is a welcome addition to this Budget. As consumers continue to make the switch to electric vehicles, and with around 30 new models being launched in the UK this year, we are on the verge of a tipping point, which could see EVs enter the mainstream.
“Financial incentives have proven to be a key factor in driving EV growth in countries like Norway and the Netherlands, aided by additional incentives such as priority parking spaces and city access. A similar strategy in the UK could help stimulate further demand.”
Incoming company car tax changes
“Today the Chancellor confirmed company car tax rates for the next five years, providing a clear financial incentive for businesses and their employees to switch from fossil fuels to electric. As previously announced, the rate of company car tax available on fully electric vehicles will fall from 16 per cent to zero per cent for the next tax year, rising by one percentage each year for the subsequent two tax years before being frozen at 2% for a further two tax years. Based on our calculations, this could result in an employee experiencing savings of around 95 per cent by choosing electric as their next company car, over a comparable diesel vehicle.
“Today’s announcement puts businesses in a unique position to enable and accelerate the move to electric vehicles. The success of this scheme in replacing higher emission petrol and diesel vehicles on our roads could be a big step towards achieving net-zero targets. However, there is still a lot of work to be done in order to maximise the scheme’s impact. In order to take advantage of the new tax scheme, businesses will need to resurrect company car schemes or think beyond their standard approach to company cars. Similarly, manufacturers will be under pressure to manage supply and we will need to see an improvement in the UK’s charging infrastructure.”
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