UK needs electric car incentives to avoid climate change ‘slow lane’, peers say

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Ministers should bring back incentives for purchasing electric cars to arrest falling sales growth and prevent the UK from entering the “slow lane” on tackling climate change, an influential group of peers warned on Tuesday.

The House of Lords environment and climate change committee criticised the government for “prematurely” axing consumer grants for electric vehicles, missing targets on building chargepoints, and sending motorists “mixed messages” about battery cars.

The cross-party group said in a report that if “significant” barriers to buying an EV were not addressed urgently, “the government’s objective of mass ownership . . . will not be met”.  

Sales of EVs — which the committee said were “essential” for the UK to hit legally binding net zero carbon emission targets — last month passed 1mn in the UK.

But growth is slowing, with purchases falling as an overall proportion of the market for the first time last year. 

While EV sales growth had slowed worldwide, the UK has fallen behind European rivals, in part because of ministers’ decision to phase out the plug-in car grant in 2022, the report said. The grant initially gave motorists up to £5,000 off the price of a new electric car.

Affordability is the biggest factor putting off buyers, it found, adding there were only nine EV models on sale for less than £30,000 compared with 87 internal combustion engine-driven cars, as of September last year.

EVs remain, on average, 35 per cent more expensive to purchase, while significantly cheaper running costs are only available to people with charging points on driveways.

The peers called on ministers to introduce “targeted grants” in order to bring the price of a new EV in line with that of a petrol car, and taper these only “when price parity has been met”.

The government should consider incentive schemes for second-hand EVs, and cut VAT on public charging from 20 per cent to 5 per cent to bring it in line with those who can charge at home, they said.

The committee added a lack of charging points was causing motorists “considerable anxiety” over their ability to recharge affordably and quickly, and recommended that ministers “urgently review outdated and disproportionate planning regulations which are a major block to the rollout”.

Last year, the government delayed a ban on the sale of new diesel and petrol cars from 2030 to 2035 — a move decried by some manufacturers and denounced by green campaigners. But it has retained binding targets for manufacturers to increase EVs’ share of total vehicles sold.

Under rules introduced last month, 22 per cent of vehicles sold by each carmaker in the UK this year must be zero-emission, a percentage that will rise each year to 80 per cent in 2030.

Warning that Sunak’s delay confused motorists, the peers also called for a new body to give people “clear and balanced information” about battery cars.

They criticised the “scale of misinformation”, citing articles in newspapers such as The Daily Telegraph, Daily Express and Daily Mail, including a debunked claim that EVs catch fire more often than petrol cars.

Misinformation masked other areas of genuine concern, such as whether some brands “mislead” customers about the true range of their models, the committee added.

The Department for Transport said it was spending £2bn on the EV transition and was on track to install 300,000 public charging points by the end of the decade.

It added it was making charging points “more accessible”, with a £381mn fund to help local councils install charging points “alongside new grants to install charge points in state schools and nurseries”.