Spending Review can renew EV ambitions
The latest SMMT data published this week shows the UK’s new car market moved in the right direction in May, with a return to overall growth and EV uptake on the rise – but bolder ambition is needed to drive the economic growth and decarbonisation the country needs. Indeed, last month’s uplift was just the second monthly increase this year, while the EV market share now stands at 20.9% – significantly below the 28% mandated in 2025. What green growth there is has been propped up by manufacturers providing massive discounts on the ever growing EV product ranges in which they’re investing.
Such an imbalance inevitably undermines OEM investment confidence and new product development, which is integral to the success of our industry, our ability to meet consumer needs and to decarbonise. Next week’s Comprehensive Spending Review is the right moment, therefore, to double down on the commitment to Net Zero by backing the EV transition with fiscal measures that boost the market and shore up our competitiveness. Halving VAT on new purchases, for example, would help put two million EVs on the road by 2030 and cut CO₂ emissions by six million tonnes per year. Removing EVs from the VED supplement, meanwhile, and equalising VAT on public charging with home rates would send a clear and decisive signal – 2025 is the time to switch.
The van sector faces familiar obstacles. The new light commercial vehicle (LCV) market shrank again in May – the sixth month in a row – partly due to new fiscal measures taxing double-cab pick-ups as cars. Electric van uptake is growing, but remains just over half of the 16% market share mandated for 2025. Government support through the Plug-in Van Grant is vital but further green growth hinges on faster investment in LCV-suitable charging infrastructure – at depots, shared hubs and public locations. Preferential treatment for depot grid connections and efficient planning policy implementation are essential.
Consumer reticence is already being seen with the average of a car on UK’s roads now 9.5 years – compared to around eight before the pandemic. This is a good opportunity for the aftermarket sector as the demand for parts and service increases but maintaining the EV transition also depends on this same sector investing in the latest technology to service these new vehicles. This week’s Automechanika Birmingham showed just how vibrant the UK aftermarket is, with a wealth of technologies and innovation on display, as well as a series of targeted sessions on contemporary industry issues.
Automechanika also includes the UK supply chain, and SMMT was able to use the show to host our latest Meet the Buyer and, for the first time, Meet the Van Accessories event. With more than 250 meetings between auto businesses and those beyond our sector, it was an incredibly busy day. We were pleased to involve the Ministry of Defence this year, with huge opportunities for Britain’s supply chain in defence procurement given the increasing importance now attached to our Armed Forces, evidenced by last week’s Strategic Defence Review.
My thanks to everyone taking part this week – and a reminder that our next event, the SMMT International Automotive Summit, is less than three weeks away. 2025 of all years is not one to miss, so book your place here.