Labour should slash taxes on electric vehicles (EVs) to rejuvenate the sector and help the wider car industry achieve its climate goals, a leading motoring trade body has said.
The Society of Motor Manufacturers and Traders (SMMT) wants the new government to halve VAT on new battery EVs for the next three years, aiming to boost sales by as much as 250,000 units.
The SMMT also wants Starmer to exempt EVs from the “expensive vehicle” tariff, which adds to the vehicle excise duty for cars worth more than £40,000.
Finally, the SMMT wants VAT on vehicle charging to be equalised between the 5% paid for at-home charges and the 20% for on-street points.
This comes as the industry continues to struggle to meet the goal of 22% of all new cars sold this year being electric, making it challenging to achieve the 80% target by 2030.
Mike Hawes, chief executive at SMMT, said: “The first half of this year was 16-17%... June was at 19%, but we will need to make up a hell of a lot in the second half of this year to recover the shortfall on the mandate.
"It is tough out there. Levels of demand are much, much softer. It's not unexpected as we are moving from early adopters to a mass market phase, it is quite challenging, it is bumpy.”
UK car sales experienced a 7.6% decline in the last six months, with the slowdown in EV sales growth being a significant concern.
Despite EVs accounting for nearly 38% of the new car market, the pace of growth has decelerated since Sunak’s government extended the ban on new internal combustion vehicle sales to 2035.
Labour has since reversed this decision, reinstating the 2030 target.