The UK automotive industry is calling on the government to take swift action in converting electric vehicle (EV) sceptics into adopters by offering purchase incentives.
According to the Society of Motor Manufacturers and Traders (SMMT), such incentives could enhance the market by an additional 15% over current projections, potentially leading to two million new EVs on the road by 2028.
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This increase would not only benefit related sectors such as charging infrastructure and insurance but also significantly cut road transport emissions, the trade body said.
Current SMMT modelling indicated that, under existing market conditions, approximately 1.78 million new EVs will be registered from 2025 to 2027.
However, this figure could be bolstered by halving VAT on new EV purchases, which is projected to drive demand up by 15%, resulting in 267,000 more EVs on UK roads.
This measure would push registrations to 2.05 million, necessitating expanded services for charging, insurance, and maintenance.
While this incentive would entail a temporary cost to the Treasury of about £1,000 per car, the UK government has benefitted from a £2.5bn VAT receipt windfall over the past five years due to a tenfold increase in EV uptake.
A VAT reduction, combined with regulatory flexibility and chargepoint expansion, could cut CO₂ emissions by 6 million tonnes annually, equivalent to reducing UK aviation emissions by a sixth.
The automotive industry has seen significant manufacturer investment, leading to more than 1.3 million EVs on UK roads, supported by a diverse range of over 130 models and an average range of nearly 300 miles per charge.
SMMT CEO Mike Hawes said:“Manufacturer investment has meant ten times as many drivers are going electric compared with just five years ago. This is great progress but, with the right support for consumers, we can go beyond current expectations to put a total of more than two million new EVs on the road by 2028.
“Government investment to convert the ‘electric sceptics’ would energise business across the country far beyond just the automotive sector. Every stakeholder would benefit from the impact of consumer incentives which, when combined with binding targets for chargepoint rollout and more flexible regulation, would create a virtuous circle of rising demand that stimulates green growth.”
A recent SMMT survey, conducted by Censuswide, found that 23.1% of potential new car buyers plan to purchase an EV by 2028, falling short of the government’s 28% EV market share goal for this year.
The survey also indicated that the current EV market heavily relies on repeat buyers, with less than one in eight new car buyers actively planning to switch to an EV.
However, the survey suggested that government support, such as purchase incentives, increased chargepoint rollout, and a reduction in charging costs through VAT cuts, could persuade two in five ‘electric sceptics’ to consider an EV, leading to significant carbon savings and a more robust car market.
