It’s nearly time for the new government’s first budget! There is mounting anticipation over how the UK Government will address the ongoing challenge of boosting electric car sales that seem to be slowing down. With private EV sales showing signs of stagnation, especially compared to fleet purchases, it’s clear that further incentives are needed to help the UK transition to EVs.
So, we’ve come up with 7 ideas the Government might decide to use in the October budget! It’s a shame Electric Car Guide are not in charge, but maybe they will read this and take some inspiration!
- Reduce the Benefit-in-Kind (BIK) Rate for EVs
One of the most effective ways to incentivise company car drivers to choose electric is through the BIK tax rate. Currently set at a low rate for EVs, further reducing or freezing this rate for a longer period could provide greater certainty for businesses and employees. This would make EVs even more attractive in comparison to petrol or diesel alternatives, boosting uptake among fleets and company car drivers. - Expand Salary Sacrifice Schemes
Salary sacrifice schemes, where employees can lease an EV and pay for it through their pre-tax income, have proven popular. Expanding these schemes to include a wider range of vehicles and offering better financial incentives could make EVs more affordable for a larger section of the workforce. There are already some brilliant EV salary sacrifice schemes in the UK, and further Government backing could encourage more to adopt them, helping make EVs accessible to everyday drivers. - Reintroduce Grants for Higher-Priced EVs
Previously, the Plug-in Car Grant was only available for EVs priced under £40,000, excluding many premium models. Reintroducing a scaled grant system, where vehicles over this threshold still receive some form of support, could open up the market for higher-end EVs and increase overall adoption. - Boost Charging Infrastructure Investments
Expanding the public charging network, particularly in under-served areas such as rural locations and densely populated cities, would alleviate range anxiety and make EV ownership more practical. The Government could offer grants for local councils and businesses to install more charging points, especially fast and ultra-rapid chargers. - Provide Grants for Home Charging Units
Introducing or expanding grant schemes to help private buyers and renters install home charging stations would encourage those hesitant to make the switch. - Introduce Trade-in Schemes for Petrol and Diesel Cars
Offering incentives for consumers to trade in older, more polluting vehicles in exchange for discounts on new EVs could provide a double benefit. It would reduce the number of high-emission vehicles on the road while encouraging consumers to go electric. - Zero VAT on EV Servicing and Maintenance
To further cut costs for EV owners, the Government could consider reducing or eliminating VAT on EV servicing, EV MOTs and EV repairs. This would make the long-term ownership of electric vehicles even more attractive compared to internal combustion engine (ICE) cars.
These potential measures, alongside Ford’s call for a VAT reduction, could create a package of incentives aimed at both individual and corporate buyers.
John is the Editor and Spokesperson for Electric Car Guide.
With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.
John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.
