SMMT chief calls for electric cars to be exempt from VAT

Electric cars should be incentivised as part of the government’s 2030 electrification ambition through the removal of VAT, the boss of industry body the Society of Motor Manufacturers and Traders (SMMT) has said.

Calling for the 20% discount to be applied, which would roughly double the maximum £3000 subsidy available today for anyone buying a £30,000 car, Mike Hawes said: “We’re being asked to go from about 15% of the market to 100% being electrified in nine years. That’s a speedy transition. An incentive would accelerate that transition.

“We can see that globally, other markets are putting considerable incentives to drive consumer uptake, and we must do more. Removing VAT is one idea that we have proposed.”

During the coronavirus pandemic, both France and Germany have introduced substantial incentives for buyers of electric cars, worth up to €9000 (£8000).

Hawes also highlighted that the industry can only play a part-role in driving the uptake of EVs by building the cars, highlighting that it will ultimately be down to the public as to whether they want to buy them.

“We need consumers to accept change is happening,” said Hawes. “As an industry we face pressures to hit CO2 targets, and as a nation we have committed to the same.

“But we need the consumer to take up the technologies we develop in order to realise the changes that are being sought.”