The ban on the sale of new petrol and diesel cars to 2035 has 'backfired', SMMT says (Image: Getty)
Jeremy Hunt has been urged to get the transition to electric vehicles, also known as EVs, back on the road ahead of the Spring Budget next week.
Prime Minister Rishi Sunak announced a delay in September to the ban on sales of new petrol and diesel cars, arguing it was needed to retain public support for the switch to net zero.
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The Society for Motor Manufacturers and Traders (SMMT) said on Friday (March 1) the delay has backfired, with sales lagging the levels anticipated before the Government's delay.
Mr Sunak delayed the ban on new petrol and diesel cars from 2030 until 2035, with industry warning at the time it would damage investment.
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The SMMT said Britain's electric vehicle market was still the second largest in Europe by volume, but EV uptake was down 19 percent year on year in 2023 after incentives to boost sales ended.
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The electric vehicle industry was preparing for a 2030 deadline before the Government's U-turn (Image: Getty)
The results of a survey carried out for the SMMT showed almost half of people interested in purchasing at EV plan to wait until after 2030 to switch. This compares to one in 10 last year.
About two-thirds of non-EV drivers said they would not be switching to an electric car any time soon in a survey published in February. The survey conducted by Refused Car Finance showed a number of customers said they would not consider buying an electric car as their next vehicle.
Out of the customers surveyed who already owned an EV, 66.7 percent said they were happy with their electric car purchase and petrol and diesel options made no sense to them anymore. In their opinion, the biggest selling point of their EV are low running costs, zero emissions and a better driving experience.
Mr Hunt has been urged by the SMMT to use the Budget on March 6 to "recharge" the EV market by taking three steps.
Firstly, the SMMT wants the 20 percent VAT rate applied to a new electric car to be slashed in half, arguing that such a move would save the average buyer ￡4,000 but only cost the Treasury less than the Plug-in Car Grant.
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Sales of electric vehicles have lagged behind expectations set before the Government's U-turn (Image: Getty)
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Under that scheme, types of low-emission vehicles such as motorcycles, moped and small vans were eligible for a Government grant to make them more affordable.
The SMMT also called for Vehicle Excise Duty to be reformed to prevent most electric vehicles being classed as an "expensive car" from 2025 when a new supplement is due to be introduced.
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In its final suggestion, the SMMT should slash the VAT rate imposed at public charging points from 20 percent to five percent, in line with the rate levied on homes.
Mike Hawes, Chief Executive of the SMMT, told Sky News: "The Chancellor must end the perverse fiscal system that discourages drivers from moving away from fossil fuels and send a clear signal that the time to go electric is now.
"Success will see our economy powered up by zero emission mobility, delivering cleaner air, quieter roads and cheaper running costs, ending the uncertainty we are seeing amongst motorists."
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