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UK government denies slowdown in electrified vehicle growth due to reduced subsidies

09 May 2019 Ian Fletcher

[Excerpt]

The UK government has denied that a slowdown in electrified vehicle growth seen in April was down to a reduction in the Plug-In Car Grant (PICG). The Department for Transport (DfT) has told The Times, "Record levels of ultra-low-emission vehicles on our roads show the UK is moving towards greener transport and, as the SMMT [Society of Motor Manufacturers and Traders] figures show, sales of new alternatively fuelled vehicles have increased." The DfT added that "having kick-started the early market for ultra-low-emission vehicles, the government is focusing on encouraging the take-up of the cleanest, zero-emission vehicles, backed by the GBP1.5 billion road-to-zero strategy".

Significance: The comments made by the DfT follow a statement made by the SMMT on the release of its April passenger car registration data. The trade organisation said that plug-in hybrid electric vehicles (PHEVs) suffered a decline of 34.4% y/y during April and of 20.4% y/y in the year to date (YTD) following the decision by the government to remove subsidies on PHEVs as part of changes to the PICG. The SMMT said that this is "evidence of the consequences of prematurely removing upfront purchase incentives before the market is ready". The organisation also stated that "manufacturers are investing heavily to bring ultra-low and zero emission cars to market, with some 40 plug-in models now available in showrooms, and over 20 more expected to arrive in 2019. However, if this still emerging sector is to reach meaningful levels, measures and incentives that build business and consumer confidence will be vital." Nevertheless, the DfT's decision to focus solely on zero-emission vehicles for its next round of the PICG seems to be paying dividends, bolstered by a wider number of eligible models than ever before. Volumes of EVs in the United Kingdom have grown by 63.3% y/y in April and 55.5% y/y in the YTD. Even so, they remain a fraction of the market with a share of less than 1%, and it could be that weaker incentives could stifle EV demand relative to where it could have been under previous, higher incentives.


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The above article is from AutoIntelligence Daily by IHS Markit. Every working day, AutoIntelligence Daily provides about 30 articles focused on automotive news, events and trends. Get a free trial.

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