Hello, I’m Tom Riley, and welcome back to The Fast Charge, a British EV newsletter.
Top story in today’s edition… I run through eight policy areas worth keeping an eye on ahead of next week’s Budget. Elsewhere… INEOS go all-electric, BYD fightback, and the Britishvolt saga continues.
Before that, I have two parish updates. Firstly, there will be a smaller newsletter next week - as I’ll be abroad. Secondly, the time has come for me to raise some funding for expansion (details below).
As ever, if you have any thoughts or feedback, do get in touch via my contact details below or reply to this email.
Eight policies to watch during Budget 2024
Background: In just over a week on Wednesday 6 March, the Chancellor of the Exchequer Jeremy Hunt will deliver the Budget. This event is notable because it’s probably the last fiscal moment before a general election. This means the cash headroom available to Hunt will likely be showered on UK voters. But what could the Chancellor announce for the EV sector? I’ve highlighted eight policy areas worth keeping in mind next Wednesday.
1. VAT on public charging
At present, EV owners using a public charger pay 20% VAT, versus at home where they pay 5%. For the estimated 40% of drivers without off-street parking, this presents a rather expensive inequality. There have been numerous calls before about reducing the rate on public chargers in line with domestic supply. “The Budget is a critical opportunity for this Government to demonstrate that they are genuinely behind electrification and EVs,” explained Quentin Willson, Founder of FairCharge, who has campaigned on this matter extensively. “This would also be very much of a symbolic gesture sending an unambiguous message to global investors that the Treasury has a long term strategy to increase EV adoption and support the British car industry.”
Auto Trader is another in favour of VAT being equalised by the Chancellor. Their Commercial Director, Ian Plummer, told me: "We know drivers want to go electric, but finances remain the biggest barrier – when we see price parity between electric and petrol, demand shoots up and when petrol prices spike, as we’re seeing right now, we see an uptick in electric interest.” He added: “This budget is the perfect opportunity to show how the government are supporting consumers to make the switch.”
I would love to see VAT get reduced in the Budget, my own view is it’s unlikely. I just don’t believe the government sees it as an issue understood widely enough to do anything about yet. However, that doesn’t mean the debate will go away, and my understanding is the topic will have much more visibility and a stronger case from next week.
2. VAT on EV purchases
Maybe a load of rubbish, but I heard if you place your ear to next a car’s exhaust pipe you can faintly hear the voice of Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, saying ‘incentives’ repeatedly. Why? Because that’s what carmakers desperately want to see from the government. With the ZEV mandate in force, and private buyers seemingly not buying, many want to see new policies to refocus demand – especially after the government deflated it during 2023. SMMT, Volkswagen, and others in the industry like Auto Trader, believe cutting VAT on new or used EVs will help stimulate demand. However, one carmaker wants to see the UK go further. Last week, FIAT called on the government to reinstate the plug-in car grant.
3. Road taxes
Speaking of incentives, I raised this a few months ago, but at Autumn Statement 2022, one of the changes Hunt made was around Vehicle Excise Duty on EVs. In short, from 2025, EVs will no longer be exempt from paying the tax. Since this change was made the government moved the goalposts from 2030 to 2035 for ICE vehicles, so surely now this tax can be moved back – otherwise, there’s little benefit for EV adopters.
4. Cutting planning red tape
Last November, the Chancellor announced plans to massively reform the planning system, meaning EV chargers could be rolled out much faster. Specifically, there was a promise to consult on amending the National Planning Policy Framework to ensure EV chargers were prioritised. It’s not clear yet exactly what progress has been made on this, and I expect many across the EV sector will be waiting for an update. This is especially pertinent given a new report by the UK Sustainable Investment and Finance Association, which revealed more than half (63%) of British firms (which represent £700bn in the energy sector) have moved or plan to move their investment because the UK is unsupportive. Yikes.
5. Battery investment
Since the Autumn Statement, the government launched a battery strategy. This included £2bn for developing supply chains in Britain. There has been recent criticism of the UK’s efforts to secure battery plants, including from the House of Commons Business and Trade Committee, and more recently the Lords Environment and Climate Change Committee. The latter called for streamlined approaches to battery recycling in the UK – as it’s currently a policy area involving five government departments – and to prioritise securing new gigafactories. We may hear an update from the Chancellor next week on this, such as about Tata’s developments and those at the West Midlands site - which has been in talks with some manufacturers. The FT reported in January that Chinese carmaker Chery was in “discussions” with the government about a site.
6. Fuel duty
You might believe, given the ZEV mandate is now in action, that the Chancellor may unfreeze fuel duty as one small way to gently nudge people towards EVs – particularly as since 2022 there has been a ‘temporary’ 5 pence cut. However, changing this now would be in my mind political suicide. So, expect Hunt to keep fuel duty down.
7. Benefit-in-Kind
While the number of private buyers may be going down, electric company cars are supremely popular. In large part, this is thanks to the healthy ‘Benefit in Kind’ tax benefits for EVs. Currently, as an employee, you only pay 2% tax on the car’s value, which is why it’s so attractive to purchase. These rates are seemingly locked in until 2025 before they’ll increase by 1% annually. I see no reason to believe Hunt would change them early, though perhaps the increase could be extended.
8. Insurance support
Finally, a bit rogue, given the government’s recent ‘Plan for Drivers’, with all the endless stories about car insurance costs going up, I wonder if the Treasury could invest in green skills, such as mechanics or repair shops – especially for those reskilling so they can handle EVs in future. It would not be an immediate benefit though would mean the government could be very targeted and get reams of positive local stories out of it.
Those are my thoughts, let me know your views. Also, you’re welcome to send me any and all of your comments post-Budget.
Top EV news…
❔ The FT yesterday published a big read asking the question: Was Toyota’s bet on hybrid cars right? The piece explores the rising sales of hybrids and their preference by some carmakers. To me, taking EVs to the mass market was always going to be the hardest part, though hybrids are a good interim solution for some, they must be resisted long-term. Read more (paywall).
👪 Based on a poll of 2,800 EV drivers, leasing firm Zenith has found that families with multiple cars are still nervous about making the full switch to EV, with 51% still owning a petrol or diesel vehicle such as for long trips. Read more.
🚢 The EU’s ongoing inquiry into Chinese imported cars has been rejected by BYD who claim their success is because of “unique technology” not subsides. Read more (paywall).
🚙 INEOS Automotive, the brand created by Sir Jim Ratcliffe, has finally started to cave to electrification by announcing an all-electric 4x4. Albeit, his quote on the launch feels like he’s being dragged kicking – see it in the link– and INEOS will offer a range-extender option. Read more.
🚘 Speaking of car reveals, good news… Dacia has revealed its ‘Spring’ model that could have a starting price of £16,000. Read more.
🥐 And another – you can tell it’s the Geneva Motor Show – as Renault unveiled a production version of the original Renault 5. The launch price in the UK will be under £25,000. Read more.
🚚 Stellantis announced last week that it will manufacture electric vans in Luton from 2025. Bosh! Read more.
👮 Police forces in Scotland have installed £500k’s worth of chargers at stations scheduled for closure. Read more.
💨 In The Guardian’s latest EV mythbuster series, the paper asks: Do EVs have an air pollution problem? See here.
🖊️ The Energy Saving Trust last week published a news story about EV training courses – for upskilling local authority officers – going live. Details on applications here.
🔋 S&P Global have published a very big deep dive on EV supply chains. Lots of tasty graphs. See here.
💸 Northumberland Council is setting aside £15m of public money in case it has to buy back the land it sold to Britishvolt. As the new owner of Britishvolt – David Collard – continues to flail around, administrators EY are apparently in talks with new potential buyers. The handling of this has been a total car crash, and I think EY has some questions to answer for – especially if taxpayers are going to be impacted. However, when I asked about the above, EY told me they did not want to comment. Read more.
🤦 Finally, spotted on LinkedIn by ubitricity’s Jordan Marsden, it seems a railway station in Wales decided to install a charger… then block it with a concrete bollard. Mad! See the image here.
Parish update: Pledge your support
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Nice to see my local MP (Richard Fuller) posted the electric van industry's version of this agenda on his Facebook page.
In other news the first car with Vehicle to Vehicle DC charging launched today. The Zeekr 001 now includes a 60kW DC charger for some reason.
An influencer posted a video of charging one of the first Li Megas from 10-80% in 10 minutes, and the LFP Zeekr 001 also manages 11 minutes from 10-80%.
You might want to use LatePost and 36kr as sources. LatePost have some very good in depth articles. This week's was about the development of Xpeng's Navigate on AutoPilot software. They have also covered the building of high pressure casting machines, and the battle between Ideal and Huawei for the Chinese high end. If you use Apple then you might need to use DeepL to translate, but otherwise your browser will do it.