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Next week’s Budget is anticipated to include an announcement of an additional £1.3 billion in funds dedicated to a government scheme aimed at promoting electric vehicle (EV) adoption. This initiative, known as the Electric Car Grant, was launched in July as part of efforts to support the transition to zero-emission transport. According to the government, the scheme has enabled around 35,000 people to switch to electric cars so far. Despite this, early analysis shows little evidence that the scheme has attracted entirely new buyers to the EV market.
The scheme offers discounts of up to £3,750 on qualifying vehicles and initially had a budget of £650 million. However, a study by the non-profit organisation New AutoMotive, which advocates for the UK’s shift to electric vehicles, found that the grant has not yet significantly expanded the market. Their research revealed that EVs accounted for 23.8% of new car registrations in September, a figure unchanged from before the grant’s introduction. David Farrar, policy manager at New AutoMotive, commented, “It isn’t yet clear that it’s prompting consumers to consider buying cars that they wouldn’t have gone ahead and bought anyway.”
In addition to the extra funding for EV purchase incentives, the government plans to allocate £200 million towards accelerating the development of charging infrastructure across the country. Data from Zapmap indicates there are nearly 87,000 charging points at approximately 44,000 locations throughout the UK, including in places like supermarket car parks and on lamppost chargers. The government has stated that the new funds aim to create thousands of additional chargepoints and provide more support to local authorities, enabling easier access to reliable charging, especially for those without off-street parking. Chancellor Rachel Reeves is also expected to launch a consultation to make it simpler and more affordable for people without driveways to install charging facilities.
Besides these measures, the Budget may introduce a new tax affecting EV owners as early as 2028—potentially a pay-per-mile charge. A government spokesperson recently explained to the BBC that since fuel duty applies to petrol and diesel vehicles but not EVs, their intention is to create a “fairer system for all drivers.” Meanwhile, campaigners are urging the Chancellor not to increase taxes on drivers overall, preparing to present a petition to Downing Street calling for the continued freeze on fuel duty, which has been in place for some time. On the political front, Richard Holden, the shadow transport secretary, criticized the planned subsidies by stating, “Handing out £1.5 billion in EV subsidies while hard-working taxpayers are squeezed dry” is “madness,” adding that “ordinary families are facing increased taxes and spiralling inflation under Labour, yet the Government’s priority is handing out discounts on new electric cars.” Chancellor Reeves may raise some taxes in this Budget as she seeks to address NHS waiting lists, the national debt, and the cost of living
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