SMMT chief exec calls for a strong car market to ensure EV growth

With the chancellor’s Spring Statement to be released next week, Mike Hawes, SMMT chief executive, calls for a strong new car market for EVs as crucial for the sector’s overall growth.

He emphasises the need to convince what he calls ‘electric sceptics’ to make the switch, and highlights the removal of disincentives as a key step, having recognised that industry discounts cannot be maintained forever. He recommends exempting EVs from the VED Expensive Car Supplement, which is set to apply this coming April. Treating EVs as luxuries, rather than the necessary step towards decarbonisation, risks the EV movement running out of steam at a crucial time.

New data by SSMT suggests that having VAT on new EV purchases would be highly effective by driving demand up an extra 15 per cent on top of current outlooks to get around two million EVs on the roads by 2028. 

While Hawes acknowledges that this measure would cost the Treasury temporarily, the returns would make up for this, with higher volumes of EVs directly boosting businesses across the wider industry including the second-hand market and insurance and energy services. A CO2 reduction work six million tonnes per year would also present a significant environment benefit.

A higher volume market also makes investing in the manufactured of products in the UK attractive, as compared to doing so abroad.

Mr Hawes concludes: “Exporting to new markets is not always easy, and we are seeing the global trading environment getting tougher. The role of the UK Government Board of Trade, an institution that is fundamental to the country’s trading strength, is as critical as ever so I look forward to working with the Secretary of State for business and trade, and fellow Board members, to help Britain’s businesses expand their export potential, invest in innovative products and services, and take them to new customers around the world.”