Oliver Rix, Partner in Energy & Resources at Baringa
Partners, responds to lack of Budget pledges on electric
vehicles:
“The lack of any announcements in today’s Budget aimed at
supporting the uptake of electric vehicles, is incredibly
disappointing. Last week, the Government scrapped its grant for
plug-in hybrids, which was an essential support for both
consumers and the motor industry in the early stages of the
transition towards the Government’s goals for 100% electric
vehicles. As we’ve seen in the Netherlands, scrapping or
substantially reducing financial support can have disastrous
consequences – there, sales dropped from over 40,000 plug in
hybrids in 2015 to less than 2,000 in 2018 when changes to tax
rules were made.
"However, the Government does face a challenge. If EV uptake
continued on par with the pathway the Committee on Climate Change
has indicated would be in line with future carbon budgets, sales
would reach around 250,000 by 2020 – which based on current
grants would represent a subsidy cost of up to £780m that year.
Further, whilst plug in hybrids have short term benefits in
alleviating range and re-charging issues whilst getting zero
emission-capable vehicles on the road, it is right that the long
term trajectory focuses on 100% electric vehicles as range,
charging infrastructure and model availability improve.
"The question is how to manage a transition as EV vehicle costs
decline, without significant risk of stifling the momentum that
has been building. Just as the Government is looking at ramping
up its long term ambition in light of the IPCC’s recent report,
which revealed the dangers of missing the Paris Agreement by .5
degrees C, this decision is too much of a cut too soon. Electric
car uptake had been one of the key success stories of the UK’s
Road to Zero ambitions, but removing the grant could put electric
cars beyond the reach of consumers. We urge the Government to
review its policies on electric vehicles, as its current stance
risks putting uptake in reverse.”
