EV manifesto: how the government should help drivers switch

The Autumn Budget did very little to encourage people to switch to electric vehicles (EVs), and consequently won’t make the UK’s Zero Emission Vehicle (ZEV) Mandate targets any more realistic.

Currently, the mandate states that fully electric cars should account for 22% of each manufacturer’s sales in 2024, with that ramping up to 80% by 2030.

However, the Society of Motor Manufacturers and Traders (SMMT) forecasts that 363,000 new EVs will be registered by the end of 2024 – an improvement on 2023, but still representing just 18.7% of the market.

This is not only bad news for the Government’s environmental ambitions, but also for car makers, who face billions of pounds worth of fines if they fail to meet their EV sales targets over the next few years.

At the time of writing, business secretary Jonathan Reynolds had recently announced a fast-track consultation with car makers around potential changes to the ZEV Mandate, with a final decision due to be reached in January. But Reynolds made clear that the 2030 target would not be watered down.

We await the outcome of the consultation, but in the meantime, we’ve come up with nine proposals that would give EVs wider appeal.

1. Clarify the position on hybrid and plug-in hybrid cars

The Government needs to make clear its position on hybrids and plug-in hybrids (PHEVs) after 2030. While it has said it wants to phase out new cars and vans that rely solely on petrol or diesel engines by that year, the fact that the target for EV sales is set at 80% appears to give at least some hybrids a five-year grace period before they too will be banned.

Sadly, the Government hasn’t explicitly stated this – let alone clarified whether new hybrids will have to be capable of covering a certain number of miles on electric power to still be legal after 2030.

PHEVs, in particular, have long been seen as a stepping stone to going fully electric, giving owners the opportunity to get used to home charging and public charging, while still having the reassurance of a petrol engine. In a 2020 survey, almost half (48%) of PHEV owners said they were considering an EV for their next car, versus 9% of petrol and diesel drivers. However, we believe it’s important to offer reassurance that this technology won’t soon be unavailable on the new-car market.

2. Enforce public EV charger regulations

More regulation and greater scrutiny is needed to make the public EV charging network more reliable and easier to use. The previous Government started on this in July 2023, by introducing the Public Charge Point Regulations.

They state that rapid chargers must be 99% reliable on average, during each calendar year, and that providers must publish information about reliability. All chargers delivering power at a rate of 50kW or higher must have a contactless payment feature, and EV drivers should be able to use one app to pay for all public chargers.

These changes came into force on 24 November, but recent What Car? research into the public charging network revealed that many providers have done very little to action any of them. There is no single payment app that can be used for all public charge points in the UK, and 30% of the chargers we tested didn’t allow us to use contactless payment.

Only five of the 17 networks we looked at publish reliability data. Although the requirement to publish this doesn’t apply until 2026 (when data for 2025 must be available), we think all companies should be compelled to provide it from now on.

On top of that, we believe consumers deserve to be told what percentage of each company’s chargers were broken each year, as well as how long they were out of action for.

We also advocate expansion of the regulations to include data on annual average charging speed. EV networks should report the percentage of their chargers that provided power at or within 10% of the stated maximum output; this would empower EV drivers to choose rapid or ultra-rapid networks that provide charging rates close to those promised, and avoid sites where charges are routinely delivered at a much lower rate than advertised.

3. Limit pre-authorisation charges on public EV chargers 

Like many other companies, public EV charging networks place a holding fee on a user’s bank account. This ensures that the account is valid and that it contains enough funds to pay.

Pre-authorisation fees on credit cards only reserve part of the card’s credit limit, but those placed on debit cards put a hold on some of the money in the account, blocking it from use by the consumer. Some banks take longer than others to release the hold on those funds.

Our research revealed a big disparity between the pre-authorisation fee charged by different EV networks. While some charged just £5, and most charged between £15 and £45, others charged more than this. The worst offender was Smart Charge, a relatively new network operated by Sainsbury’s. It stung our researcher £60 up front and didn’t refund it to his account for three days.

We believe pre-authorisation fees should be limited to a maximum of 20% of the average cost of the charge. That way, even if you spent £60 using a charger, the amount frozen in your bank account would be only £12.

4. Retain EV exemption from congestion charging and play fair on parking fees 

As well as applying to all petrol, diesel and hybrid vehicles, London’s £15 daily Congestion Charge will apply to EVs from 24 December 2025. We believe this is the wrong decision, because it removes an incentive for drivers to switch to electric cars.

While it’s true that an EV adds to congestion like any other vehicle, it doesn’t have an impact on local air quality – not only in the most congested areas, but anywhere in the city. Any incentive to switch to a zero-emissions car to use in the centre of London is thus beneficial way beyond the Congestion Charge zone.

We’d like to see the same thinking applied to all 12 regional Clean Air Zones (CAZs) in the UK, with a universal ruling that charges not be imposed for EVs.

When it comes to residents’ parking permits, we think it’s fair that EVs should face lower fees than the lowest-polluting combustion cars, as an incentive towards uptake of the former. Unfortunately, this isn’t always the case, because some authorities set permit costs for EVs based on their battery size.

For example, in Islington, only owners of EVs with batteries smaller than 59kWh face a lower fee than those with petrol cars that emit 120g/km of CO2 or less – equivalent to a Ford Puma small SUV. That car attracts a £150 fee – the same as the fee levied at EVs with 60-69kWh batteries, such as the Kia Niro EV. And the fee rises as high as £230 for EVs with batteries of 90kWh or larger, such as the Ford Mustang Mach-E.

This disincentivises families from switching to an EV as their only car, many of whom need the longer range that larger batteries can provide.

The Government should also provide funding for local authorities to make all council car parks free for EVs while they are being charged. This will be especially helpful to those who can’t charge at home.

5. Speed up planning reform proposals

In the 2023 Autumn Budget, the previous Government announced changes to legislation to remove some of the biggest obstacles to the rollout of the public EV charging network.

It said it would remove unnecessary planning constraints to accelerate the expansion of the EV charging infrastructure and consult on amending the National Planning Policy Framework to ensure prioritisation of EV charge points, including EV charging hubs.

It also promised substantive action to speed up connection to the electricity grid. With some projects facing a wait of five years before connection is possible, the promise of an extra 100GW of grid capacity was hoped to bring that delay down to a maximum of six months.

However, little progress has been made in either area so far. The consultation on reforms to the National Planning Policy Framework will report its findings in early 2025.

Lewis Gardiner, head of operations at Osprey Charging, said the Government needs to improve the ease and speed of the interactions that EV charging station installation networks go through with the planning and highways departments and regional grid operators.

“A big step forward would be to follow Scotland in including the installation of new substations for EV charging hubs under Permitted Development Rights,” he said, “rather than requiring the full planning process, which significantly delays these projects.”

At present it can take up to three months to get permission to undertake even small jobs, such as digging up a pavement, again seriously slowing down installations. Gardiner says companies installing fibre cabling can issue their own permits, and we believe EV hub installers should be able to do the same.

6. Halve the VAT on new EVs

Halving the VAT on new EVs would, on average, save buyers around £4000 off the initial purchase price. As a result, SMMT research suggests a VAT cut would be the single most effective measure for encouraging drivers to go electric sooner.

Almost four in 10 drivers (37%) surveyed by the organisation said a reduction in VAT would accelerate their plans, and a quarter of drivers (26%) who weren’t interested in switching named it as the incentive that would be most likely to change their mind.

The SMMT estimates that bringing down the VAT rate on new EVs from 20% to 10% would help to put at least two million more of them on the road by 2028.

With the current average price of an EV at £59,000, each sale would bring £5900 to the Government’s coffers – or £11.8bn in total. So, although this move would create a cost for the Government, the SMMT estimates a relatively low net expense of less than £1.4bn.

7. Remove the luxury car VED levy on EVs

The Government’s 2024 Autumn Budget decision to no longer exempt EVs from the ‘expensive car’ road tax supplement is a massive disincentive to buyers. From next April, EVs costing £40,000 or more when new will join their petrol and diesel equivalents in incurring an additional fee (currently £410 a year) from years two to six.

This applies to used EVs as well; anyone who buys a one-year-old car and keeps it for five years will be paying an extra £2050 on top of the £10-per-year standard road tax rate for EVs that was also introduced in the Budget.

Many electric family EVs cost more than £40,000; indeed, around seven out of 10 buyers will be liable to pay the supplement. While we don’t think it should be scrapped altogether, the threshold for paying it should be set far higher – up to £60,000 at least – so that more families can consider an EV without facing a substantial annual road tax bill.

8. Reduce VAT on public charging

The VAT rate charged on the electricity used by public EV chargers is 20%, while the rate for home charging is 5%. In order to help the 30% of people who can’t home charge, VAT levied on public charging should be brought down to the same level as that for home charging.

We’re not alone in thinking this is a vital change that will boost EV sales; 12 car makers wrote an open letter in October stating the case.

By 2035, the Government wants all new cars to be electric, but the current system actively discourages drivers without access to a home charger – such as those in housing with no off-street parking – from moving to an EV, by charging them four times more VAT to plug in than is paid by homeowners with driveways.

9. Stop electricity unit prices being tied to the cost of gas

At present, the UK has some of the highest electricity prices in the world, and part of this stems from the way that prices are historically linked to the cost of gas.

The unit cost of electricity is based on how much it costs to produce at peak demand times; think of that moment in football World Cups during the half-time adverts when everyone in the country puts the kettle on. During that surge, additional power generation is called for – and that’s often powered by gas. Only oil-fired power stations are more costly to run.

As the UK moves towards renewable energy, the demand on gas power has declined – from 119 terrawatt hours (tWh) in 2017 to 98tWh in 2023. In fact, power industry journal Carbon Brief has determined that gas power generation has declined by 43% in the past 15 years.

At present, 39% of the UK’s electricity is produced using renewable energy, and as this increases, it will make even more sense for gas and electricity prices to be uncoupled. Accounting for gas power stations in the electricity price cap gives rise to unrealistically high unit prices.

It’s also worth noting that four new offshore wind farms have recently been green lit for UK waters, including the world’s largest – Hornsea 4 – to be built off the North Yorkshire coast.

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