The government is currently in a bit of a bind as car manufacturers voice their discontent over the current rules aimed at promoting electric vehicles. These rules seem to be having an adverse impact, with consumer demand for electric cars falling short of expectations and manufacturers struggling to meet sales targets. Ford's recent decision to cut 800 UK jobs is seen as a direct consequence, and Vauxhall's owner Stellantis is closing its van-making plant in Luton for similar reasons. So, what can be done to boost electric vehicle sales?

Unraveling the Challenges and Solutions in the Electric Vehicle Market

Subsidise the Cost

Electric vehicles generally come with a higher price tag compared to their petrol or diesel counterparts. This is partly due to the relatively small production volume, which hasn't yet allowed for economies of scale to fully take effect. The government has already been providing some subsidies to make EVs more affordable. For instance, they attract a lower rate of company car tax. Salary sacrifice schemes also enable workers to lease cars cheaply through their employers using their untaxed income. However, since the 2022 abolition of the plug-in grant for cars, there has been a lack of similar incentives for those not getting a car through their company. Automotive journalist Quentin Willson, who now leads the campaign group FairCharge, believes the government should consider offering "interest free loans on used electric vehicles for lower income drivers and halving the VAT on new cars." This could potentially be funded by abandoning the current freeze on fuel duty.There is a clear need to address this cost issue to make electric vehicles more accessible to a wider range of consumers.

Make Cheaper Electric Cars

The price of electric cars is gradually coming down, mainly due to the decreasing cost of battery packs. Despite fluctuations in the value of metals like lithium and cobalt used in batteries, pack prices have dropped by about 70% since 2015. This has helped narrow the price gap between electric and conventional cars. Stellantis, for example, started offering the electric version of its Frontera model at the same price as the petrol hybrid model earlier this year.However, finding truly cheap electric cars remains a challenge. There is a shortage of such options in the market. Many manufacturers have focused on more expensive and potentially more profitable models. But as Roger Atkins, the founder of the Electric Vehicles Outlook consultancy, points out, "cars that cost £50,000 to £60,000 are not the kind of cars everyone can buy."Thankfully, change is on the horizon. The Dacia Spring was launched in the UK a few weeks ago with a starting price of £14,995. The newly launched Leapmotor T03 costs only a little more. Chinese giant BYD has also announced that it will bring a version of its super-budget Seagull model to the UK next year. These developments offer hope for those looking for more affordable electric car options.

Cut Out the Confusion

The government has set a target of banning the sale of new petrol and diesel cars in 2030, but there is uncertainty surrounding this deadline. Originally, the plan was to phase out conventional cars by 2040 under Theresa May's government. It was then brought forward to 2030 under Boris Johnson but later delayed to 2035 under Rishi Sunak.This changing target has created confusion among consumers, leading some to delay purchasing an electric car until the situation becomes clearer. Melanie Shufflebotham, the co-founder of electric charging guide Zapmap, notes that many drivers are "confused about dates, concerned about costs and have questions about charging." A consistent and factual communication program is needed to address these concerns and provide clear guidance to consumers.

Cut VAT on Public Charging Points

The cost of using public charging points can vary significantly depending on the provider and charging speed. Generally, public chargers are more expensive than charging at home, partly due to tax. EV owners pay 5% VAT on electricity when charging at home, but 20% when using a public charger. This puts those without access to home charging at a disadvantage.The industry, EV advocates, and even a House of Lords committee have called for the public rate to be reduced to 5%. Consultant Roger Atkins claims that the current policy is "divisive" as it "favours better-off people who can charge at home on their driveways."Reducing VAT on public charging points would make it more affordable for all EV owners and help level the playing field.

Sort Out the Public Charging Network

When looking at surveys of potential electric car buyers, concerns about charging infrastructure always top the list. People worry about finding a charger at busy service stations or in rural areas. The number of charging points is indeed growing. According to ZapMap, as of October this year, there were 71,459 charging points across the UK at 36,060 locations, representing a 38% increase from the previous year.However, not everyone is satisfied. Existing owners often complain about difficulties finding a charging point, having to queue for a long time, or arriving to find a broken charger. With more EVs on the roads, the demand for charging points will only increase. The government aims to have 300,000 charging points in place by 2030, but the current rate of expansion is not fast enough to meet this target.Local authorities play a crucial role in granting planning permission for new rapid charging hubs. According to Roger Atkins, the process is often too slow. Simon Smith of charging firm Instavolt also agrees that red tape is a problem and that difficulties in getting grid connections for rapid charging stations is a "critical barrier" to expanding the network.Greater support is needed to address planning delays, local council resistance, and grid connectivity challenges to ensure a reliable and accessible public charging network.