www.aftermarketonline.net MAY 2025 On the Road 53 Fining manufacturers to help meet government targets is perverse failing to meet production targets. Paul Philpott, president and CEO of Kia UK Limited, warned against the danger of talking down the progress that is being made in terms of the electric transition. However, even he said that fining manufacturers to incentivise and discount vehicles to meet government targets was “perverse”. The SMMT said while demand for EVs is growing, a tenfold increase in five years — from 37,850 buyers in 2020 to 381,970 in 2024 — has only been possible because vehicle manufacturers have shouldered colossal costs in designing, developing, producing and subsidising their sale. Modelling by the SMMT suggests that under current market conditions, more than 1.7 million new EVs will be registered between this year and 2027. But growth could be accelerated by halving VAT on new EV purchases. SMMT’s chief executive, Mike Hawes, said this would drive up demand by a further 15%, putting 267,000 additional new EVs (rather than ICE vehicles) on the road. This in turn would increase registrations to more than two million EVs, which would all require charging, insurance, maintenance and energy services, and ultimately increasing supply into the used car market. According to the SMMT, while such a step would incur a temporary cost to the Treasury (an estimated £1,000 per car) the past five years have seen the UK government accrue a £2.5 billion VAT receipt windfall as EV uptake has increased tenfold. The measure, when combined with flexible regulation and mandated chargepoint rollout, would help drive a bigger and cleaner new car market, pushing down CO2 emissions. But purchase incentives are now critical to delivering volume, with SMMT’s latest consumer survey revealing fewer than a quarter of would-be new car buyers plan to get into an EV between now and 2028, which is well below the market share mandated for 2025. Q New SMMT research reveals just one in eight new car buyers intend to switch to electric in the next three years – but two in five electric sceptics say they’d change their mind with a purchase incentive; Q Industry modelling shows path to encourage 250,000 extra EV buyers by 2028; Q More flexible regulation and targets for chargepoint rollout essential to deliver economic growth, reduce emissions. SMMT chief executive Mike Hawes Future of roads minister Lilian Greenwood
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