UK EV Incentives Causing Havoc

The current UK Government has actually been more proactive, and more engaged with the Automotive industry than many of the past couple of decades. These things though, are all relative.

We have indeed finally seen some relief for auto makers in the UK in the form of a relaxing of emissions legislation a few months ago. Since then, turmoil has continued, and the uptake of EVs remains stubbornly below where it is required to be both legislatively and commercially for the industry to recover from the historically low production volumes we currently find ourselves.

So, speeches have been spoken, pledges have been pledged, and now we have confirmation that discount “of up to £3,750” will be made available for Private EV Purchases. Hurrah!

But wait…

The details haven’t actually been released yet, so how one might go about getting the full £3,750 remains undefined. In fact, aside from stating the cars must be below £37,000 OTR, no real substance has been released about the proposal at all. There are around 50 eligible cars on sale in the UK currently, although several are from Chinese OEMs, rumoured to shortly be excluded from the eligibility criteria on sustainability grounds. Those that are eligible and already struggling to make a £37k EV financially viable are now restricted in price movement up to the previous consumer barrier of £40k where luxury car tax rule becomes the overriding factor, adding £425 to the buyers running costs for the first 5 years.

And where does this leave OEMs and dealers?

The first and most immediate effect is a slew of cancelled orders for EVs. Arguable sensibly, buyers are backing out of paying full whack for their new EV when waiting a few months might herald a significant saving in the region of 10%. This coupled with a slow June and July, and on the eve of the traditionally “end of reg” August means cash flow is severely being squeezed.

What’s more, the well-funded, cash-rich Chinese OEMs, expecting the legislative worse, have dropped their prices to keep up with the competition. So buyers are flocking back to them instead of waiting for the incentives. The net effect is that the slow implementation of what is, on paper at least, a very positive action is having the exact opposite effect as to what was intended.

Faster, more informed and better executed strategies are needed in days, not weeks, not months, to help the Automotive industry survive. We have such a strong heritage, tradition and reputation for automotive engineering, stretching back to the dawn of the car, and such a strong contingent of enthusiasts beating the drum. Lets push for the support to those wielding the power!