The Society of Motor Manufacturers and Traders (SMMT) has called on the UK government to implement purchase incentives to convert electric vehicle (EV) sceptics and stimulate greater demand.

According to new modelling by SMMT, such measures could boost the EV market by an additional 15%, resulting in two million new EVs on UK roads by 2028.

This surge is anticipated to benefit sectors including chargepoint infrastructure, insurance, maintenance, and energy services, while significantly reducing road transport emissions.

Short circuits

Under current market conditions, SMMT projects that 1.782 million new EVs will be registered between 2025 and 2027.

However, halving the VAT on new EV purchases could drive demand up by a further 15%, adding 267,000 additional EVs to UK roads.

This increase would elevate total registrations to 2.05 million electric vehicles, all of which require associated services and contribute to a greener used car market.

While this VAT reduction would entail a temporary cost to the Treasury—approximately £1,000 per car—the past five years have seen the UK government accrue a £2.5 billion VAT windfall as EV uptake has increased tenfold.

Combined with flexible regulation and mandated chargepoint rollout, this measure could motivate a faster and larger public move to EVs.

A larger and cleaner new car market would reduce CO₂ emissions by around six million tonnes annually, equivalent to cutting UK aviation emissions by almost a sixth—and stimulating nationwide growth.

The current state

Despite manufacturer investments leading to more than 1.3 million EVs on UK roads and over 130 models available with an average range of nearly 300 miles per charge, natural demand still requires stimulation to meet Zero Emission Vehicle (ZEV) Mandate targets.

Established under more optimistic market conditions, these ZEV targets are challenging manufacturers.

Manufacturers themselves offered £4.5 billion in discounts to UK buyers last year to encourage EV adoption.

A recent SMMT survey reveals that 23.1% of prospective new car buyers plan to acquire an EV between now and 2028.

However, this figure falls short of the government’s aspiration for a 28% EV market share this year alone.

The survey also indicates that the EV market heavily relies on existing EV drivers, who comprise almost half (48.7%) of respondents, while fewer than one in eight (11.6%) new buyers actively intend to switch to an EV.

These findings align with a survey conducted by the AA, which reported that over 20% of drivers have stated they will never buy an EV, citing concerns about government support and infrastructure.

Additionally, 22% of drivers still intend to purchase petrol or diesel vehicles despite the upcoming 2030 ban on their sales.

Economic and environmental

The SMMT’s publication, “In It Together: Why every sector wins with EV volume,” explores how increased EV volumes can boost business across multiple sectors beyond automotive.

More extensive EV adoption would support the transition across all road transport, enhance infrastructure rollout, and improve cost-effective insurance and maintenance provisions.

This expansion would also lead to more investment in grid connections, supporting depot charging essential for zero-emission heavy goods vehicles (HGVs).

The urgency for action is underscored by the current state of charging infrastructure. As of 2023, there was just one standard public charger available for every 35 plug-in cars on the road, a figure that has seen little improvement from the previous year.

Public attitudes and failing government incentives highlight the need for accelerated investment in EV infrastructure to meet growing demand and ensure consumer confidence.

Plugging in

Mike Hawes, SMMT Chief Executive, emphasised the need for government intervention: “Manufacturer investment has meant ten times as many drivers are going electric compared with just five years ago. This is great progress but, with the right support for consumers, we can go beyond current expectations to put a total of more than two million new EVs on the road by 2028.”

He added that government investment to convert the ‘electric sceptics’ would energise business across the country far beyond just the automotive sector.

While the UK has made strides in EV adoption, the British motor industry and support businesses believe greater governmental support is essential to imporve momentum in the general national conversion to electric power.

They believe that achieving future targets necessitates a comprehensive government support strategy, including purchase incentives, infrastructure development, and public education to address consumer hesitancy.

Such measures are vital to realizing environmental goals and stimulating economic growth across various sectors.