Maria Bengtsson, EY Director, comments on measures announced in the Budget:
“With the announcement of funds to support the roll out of fast-charging infrastructure, the Government seems to have assessed this to be the main barrier to accelerated sales of electric vehicles (EVs). However, more policies are required to drive change of consumer behaviours in the UK, given the net-zero target. The comparative costs of purchasing and running an electric vehicle and a traditional combustion engine needs to be reduced to make the choice of vehicle an environmental rather than financial question. Some industry bodies had been hoping for an announcement in relation to tax reliefs, for example reduced or removed VAT on the sale of new EVs, but this was not to be.
“£500m was announced to be allocated over the next five years to support the rollout of a fast-charging network for EVs. It is unclear to what extent funds will be available to cover a period of loss making before higher EV penetration will lead to higher utilisation of the charge points, which is a considerable barrier to preventing investment in the sector.
“We can only assume that more policies will come through the Office for Low Emission Vehicles’ future comprehensive review of electric vehicle charging infrastructure. It will be important for the Government to be able to present the results and announce future direction in a timely manner.
“There had been an expectation in the market that the Budget would address automotive supply chain, for example by supporting battery investment in the UK. However, batteries were not specifically mentioned as an area of particular focus, despite being a key aspect for EV manufacturing. Let’s hope they will be included in the announced increase in spending on R&D.”