Government must offer stronger incentives to sway EV sceptics
March 13, 2025 by Siobhan Doyle
Car changing is a big deal
Can the government win over EV cynics? Better buying incentives could do the trick.
The automotive industry is calling on the government to act swiftly and encourage British consumers to embrace electric vehicles (EVs) through better purchase incentives.
Such action could boost EV sales by 15%, adding two million new EVs to the market by 2028. This could benefit industries like chargepoints, insurance, and maintenance, while significantly cutting road transport emissions, according to the Society of Motor Manufacturers and Traders (SMMT).
In fact, new SMMT research predicts that 1.78 million EVs will be registered from 2025-2027 under current conditions. But a VAT cut on new EVs could increase demand by 15%, adding 267,000 more vehicles and pushing total registrations to more than two million.
While this would cost the Treasury about £1,000 per car, the UK has already gained £2.5bn in VAT revenue thanks to higher EV uptake.
Alongside expanded chargepoint infrastructure, this could cut CO2 emissions by six million tonnes annually – equivalent to reducing nearly a sixth of the UK’s aviation emissions.
EV investment is growing, with over 1.3 million electric cars already on the road and more than 130 models available. However, demand still needs a push to meet the targets set by the Zero Emission Vehicle (ZEV) Mandate.
A recent SMMT survey found that 23.1% of potential buyers intend to purchase an EV by 2028, but fewer than one in eight are seriously considering the switch.
Government support – such as purchase incentives, expanded EV chargepoints, and a VAT reduction – could encourage more consumers to go electric, leading to major carbon savings and growth in key sectors.
SMMT Chief Executive Mike Hawes said that with the right support, over two million new EVs could be on the road by 2028, driving economic growth, cleaner mobility, and social change.
“Investment to convert the ‘electric sceptics’ would energise business across the country far beyond just the automotive sector,” Hawes said. “Every stakeholder would benefit from the impact of consumer incentives which, when combined with binding targets for charge point rollout and more flexible regulation, would create a virtuous circle of rising demand that stimulates green economic growth.”
At SMMT Electrified, managing director of Ford, Lisa Brankin, and commercial vehicles company Scania’s head of e-mobility, Fredrik Allard, joined Mike Hawes to highlight the urgent challenges facing the transition to EVs and call on the government for immediate, coordinated support.
EV adoption in the UK has slowed due to high upfront costs, expensive public charging, and insufficient charging infrastructure. Hawes, Brankin, and Allard warned that the government’s ZEV targets are at risk without robust demand, and tariffs and trade threats could hurt consumers and businesses. Competition from Chinese brands and the need for a fair but open market are long-term strategic issues.
Lilian Greenwood, minister for the Future of Roads at the Department for Transport, was also at SMMT Electrified, delivering a speech that responds to the industry’s call for stronger incentives.
She said: “Our ambition is clear: no new cars relying solely on combustion engines will be sold after 2030. And all new cars and vans will need to be 100% zero emission by 2035. Those pledges are ironclad.”
Greenwood also acknowledged public concerns about charging and outlined steps to improve infrastructure and access. “Consumers can access 24/7 live charge point data and contactless payment at many charge points,” she said. “We announced £200m investment to continue powering the chargepoint rollout, unlocking £6bn of private investment.”
She also reassured people about the concerns surrounding the upcoming VED (road tax) for EVs starting in April 2025, but stopped short of promising a reversal, suggesting it’s under government-wide discussion. “We want to encourage people to take up electric vehicles. It’s why people benefit from the reduced rate for the first year of VED.”
SMMT’s latest publication, In It Together: Why every sector wins with EV volume, explores how larger EV volumes boost business for multiple sectors beyond automotive, and how those same sectors can play a vital role in driving up EV uptake themselves – creating a virtuous carbon-cutting circle of economic growth, cleaner mobility and social change.
Car change? Carwow!
Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.
Click here to follow us on WhatsApp, where you can keep up-to-date with all the latest news, reviews, advice guides and videos.