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NFDA urges Government to safeguard plug-in grant ahead of Budget

NFDA 10/02/2020

“UK motorists should continue to receive incentives to ensure a consistent and successful transition to electric vehicles, in particular, this must include preserving the current plug-in grant”, said Sue Robinson, Director of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK.

In its submission ahead of the Budget taking place on 11 March 2020, NFDA has urged the Government to safeguard the plug-in car grant which has proved successful in encouraging consumers to buy an EV.

Maintaining the plug-in grant

Despite the continuous, significant growth, combined alternative fuel vehicle registrations accounted for only 11.9% of the market in January. Feedback from retailers and evidence from consumers* suggest that the price of electric vehicles continues to be one of the most prohibitive barriers to increased uptake.

Currently, no plug-in car grant funding is guaranteed beyond 2020. As a result, uncertainty and confusion over this important incentive may affect consumer confidence in the plug-in vehicle market, to the detriment of both the environment and industry.

Rebalancing VED system

Additionally, in its submission ahead of the Budget, NFDA called for a more balanced Vehicle Excise Duty (VED) system. Currently, following the first year VED payment, all vehicles under £40,000 pay the same standard fee unless they emit zero CO2 emissions.

NFDA does not wish to see higher CO2 emitting vehicles pay less VED. Instead, NFDA wants a vehicle’s whole life cycle to be accounted for. In this way, the VED system would incentivise cleaner purchases not only in the new car market but also in the used and nearly new sectors.

Sue Robinson added, “Cost continues to represent one of the key barriers to the uptake of EVs and the plug-in car grant is therefore key to broadening the appeal of zero-emission vehicles at this early stage of the market.

“With the ban on petrol, diesel and hybrid cars brought forward to 2035, the role of franchised retailers in providing accurate information to the mass-market is more important than ever. Lack of affordability must not be the reason consumers hold on their existing vehicles rather than buying an electric car.

“Government must end the uncertainty by protecting the grant and provide consumers and industry with a clear roadmap for the future of the grant”.

*47% of respondents indicated ‘cost’ as a barrier to the purchase of an electric car in the NFDA Consumer Attitude Survey 2019; additional barriers were ‘access to charging’ (53%) and ‘battery range’ (51%).

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The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.