Boris Johnson cuts costs with electric car

Lhe British government announced on Tuesday that it would put an end to a subsidy of 1,500 pounds (more than 1,700 euros) paid to purchasers of certain new electric cars to focus on other vehicles, attracting the wrath of the automobile industry.

With this program started in 2011, the government has “supported the sale of nearly half a million” electric cars, he said in a statement. But the executive says it wants to focus now on supporting other types of electric vehicles: taxis, motorcycles, vans, trucks and wheelchair accessible vehicles, for which it provides an envelope of 300 million pounds.

The UK has set a 2030 ban on sales of new petrol and diesel vehicles in the country – 2035 for the EU – and had already announced in March the provision of 1.6 billion pounds to reach 300 000 public charging points by 2030.

Wrong message

“The decision to remove the subsidy for plug-in cars sends the wrong message”, and comes “at the worst time” for a sector which has not yet recovered from the pandemic, denounced Mike Hawes, director general of the SMMT, the UK industry association, in a statement. “We are now the only major European market to have no initial purchase incentive for electric cars,” he said.

But perhaps not for long, because, if aid is dwindling over the years – this is the case in France – some countries are beginning to wonder about such massive and high aid. They make a powerful contribution to the take-off of the market which, without that, would have remained becalmed. But they mainly benefit wealthy households and companies that would have the means to buy them anyway if they wanted to.

However, to trigger the decision which borders on a change of paradigm, the windfall effect has fully played its role. On the other hand, the considerable tax revenues hitherto attached to the sales of thermal cars have vanished and the executives are now looking at how to restore them by puncturing the electric car one day.

” To give back [les voitures électriques] accessible to all, we need prices to come down”, vainly added the association of road users RAC, saying it was “disappointed that the government has chosen to end the subsidy at this stage”.

Temporary funding

However, the executive has “always been clear on the fact […] that it was temporary funding,” he said in his press release. He notes that the amount, initially set at 5,000 pounds, had already been gradually reduced, with “little effect on the rapid acceleration of sales” of electric cars.

The government also argues that motorists opting for electric already benefit from the savings made on fuel, but also from a zero road tax and favorable tax rates on company cars.

The automotive sector in the UK is plagued by a long-lasting shortage of spare parts as a result of global supply chain disruptions.

But sales of electric cars continue to grow in the country and now represent a sixth of all cars sold, and even a little more than half if we include all hybrid vehicles. What you should not do, because, remember, hybrids are not electric, but mostly thermal.