Delivering his second Budget as chancellor
yesterday (Wednesday 22nd November),
announced UK government funding of over
£340 million to boost sales of electric cars and to develop new
regulations for driverless cars. The Chancellor confirmed
that the government’s ambition is to
create "the most advanced regulatory framework for driverless
cars in the world" with a road worthiness target date of
2021.
According to GlobalData, a leading data and analytics company,
last year’s total UK electric vehicle population reached 33,400
cars. Following yesterday’s announcements the company estimates
this number will increase four-fold to reach 120,000 electric
cars by 2020 representing an average annual growth rate of
37.4%.
Panos Emmanouilidis a Senior Analyst at
GlobalData commented, ‘‘We have revised our electric vehicle
sales estimates for the UK upwards based on yesterday’s Budget
announcement that the government with funding support from
industry
will be spending £440
million on research and infrastructure development and a further
£100 million to offer discounts for people buying electric
vehicles until 2020.
‘‘The challenge remains that sales of electric
vehicles are still heavily dependent on tax benefits and funding
support from the government, so the extension to 2020 is welcome
news. When this support is removed as was the case in Denmark
last year, sales of electric vehicles show rapid decline.’’
In 2016, the Danish government decided to phase out financial
incentives on buying electric vehicles and as a consequence
according to GlobalData estimates sales could fall by as much as
45% in 2017. This contrasts with a rise of nearly 80% in electric
vehicle sales in neighbouring Sweden and an average 30% rise
across the European Union during the same period where many
governments have maintained their subsidies.
The UK Chancellor also revealed that the
benefit-in-kind tax for charging an electric car at work will be
removed.
Emmanouilidis added, ‘‘The launch of more
affordable electric vehicles over the next three years in
combination with UK government subsidy support will make electric
vehicles more appealing to UK motorists and increase demand. The
key announcement in the budget was the £400 million
infrastructure investment which will deliver many
more charging points. Without an adequate charging
network capable
of meeting the growing demand for
electric vehicles, motorists will remain hesitant about investing
in this technology.’’
Editor’s
notes
Comments provided by Panos
Emmanouilidis a Senior Analyst at GlobalData
- £340 million = £200 million towards infrastructure (which is
half of the £400 million announced with the other half or £200
million coming from industry) + £100 million funding discounts on
new vehicle purchasing to 2020 + £40 million electric car
research.
