UK Auto Industry Urges Government to Halve VAT on EVs

The UK automotive industry is urging the government to halve VAT on new electric vehicles (EVs) to stimulate demand, particularly from hesitant consumers. According to the Society of Motor Manufacturers and Traders (SMMT), such a tax cut could lead to an additional 267,000 EV registrations by 2028, raising the total to 2.05 million. Currently, only 23.1% of potential buyers plan to switch to EVs, which falls short of the government's target of a 28% market share this year. Industry leaders argue that the existing zero-emission vehicle (ZEV) mandate is putting significant pressure on manufacturers, resulting in £4.5 billion in discounts in an effort to meet sales goals. They emphasize that without government incentives and support for consumers, the transition to electric vehicles could stall, risking job losses and factory closures. The SMMT highlights that the growth in consumer demand has been lower than expected, making immediate action essential to avoid de-industrialization in the automotive sector.