The automotive industry is calling on George Osborne to use next week’s Autumn Statement to pledge continued support for the electric vehicle market through the Government’s green car grant.
In a letter to the
Chancellor of the Exchequer, the S
ociety of Motor Manufacturers and Traders (SMMT) has stressed the importance of continued support of the
Plug-In Car Grant, which is due for review in early 2012. And the SMMT said it is also calling for the subsidy to be extended to
electric commercial vehicles from next year.
"It is certainly something we are keen to see happen – [the Plug-in Car Grant's] continuation in its current form for cars, but in addition for light commercial vehicles to benefit from the same incentive," a SMMT spokersperson said.
The Plug-in Car
Grant was introduced at the beginning of 2011. It offers 25 per cent off, up to £5000, to anyone buying a qualifying new electric or hybrid car, such as the Nissan LEAF and Mitsubishi i-MiEv. But figures up to October have been lower than expected, showing only 1221 cars sold on the back of the grant this year. There is now concern in the automotive industry that instead of being extended next year, the subsidy could be axed or discontinued in the Chancellor’s Autumn Statement on November 29.
Electric car salesThe SMMT today defended this year’s Plug-in Car Grant sales figures, saying they represented an 800 per cent increase on electric vehicle sales in 2010, when 116 were sold.
"Given that the market has only been up and running since January, I don’t know if we would call it a disappointing uptake. There was no electric vehicle market lat year and it’s getting on for 10 times the size this year. It’s still very early days. It’s understandable that an incentive like this will take time to kick in," the SMMT spokesperson said.
"As we look forward to next year, we are going to be seeing a different sort of electric vehicle on the market – range-extended electric vehicles."
Range-extended electric vehicles launching next year and already approved by the Plug-in Car Grant include the Vauxhall Ampera, the Chevrolet Volt and the Renault Fluence ZE.
Commercial vehicles
The SMMT spokesperson said the organisation was also talking to the Government about extending the Plug-in Car Grant to electric light commercial vehicles.
"Extending [the grant] to commercial vehicles is in line with everything the Government is setting out to drive the low carbon economy and the policy team has been discussing this very point with ministers and we are looking forward to the Autumn Statement for indication on this," said the spokesperson.
Sales of electric commercial vehicles are still much lower than for electric cars because most are still being trialled and are in limited production, but more are expected to launch onto the market next year, including the Renault Kangoo.
"As we look forward to the Renault Kangoo coming out, it’s a good time [to extend the Plug-in Car Grant to commercial vehicles], because the market is beginning to develop," the SMMT spokesperson said.
R&D tax relief
In its letter to the the Chancellor, the SMMT has also called for ongoing support from the Government for low carbon vehicle manufacturing, and in particular reform of the large company scheme for
R&D tax relief to ensure the UK automotive sector stays at the forefront of the development of low and ultra-low carbon technologies. Investment so far this year in the UK automotive manufacturing sector has reached over £3.9 billion, while UK car manufacturers invest £1.5 billion in R&D every year, according to the SMMT.
"Next week’s Autumn Statement will be crucial in determining the rate of UK economic recovery and the future decisions of global automotive companies and their supply chains," said SMMT chief executive Paul Everitt. "The Chancellor must take this opportunity to position the UK as a prime location for manufacturing and incentivise private sector investment in R&D, skills and capital equipment. We have an opportunity to speed up the re-balancing of the economy and to generate new high value employment."
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