UK Edition
Brussels is set to push back planned post-Brexit tariffs on electric cars by three years in a boost for vehicle manufacturers on both sides of the Channel.
The European Commission will reportedly approve a plan to delay new tariffs that would add 10pc to the cost of many electric cars from January.
News of the delay came as industry figures showed that sales of electric vehicles in the UK fell by the most ever in a month in November after Rishi Sunak’s climbdown on banning petrol models.
Sales of electric vehicles (EVs) plummeted by 17pc in November, according to the Society of Motor Manufacturers and Traders (SMMT).
It came after the Prime Minister in late September pushed back a ban on new petrol car sales from 2030 to 2035. Carmakers warned the announcement would knock consumer confidence in electric cars.
The industry has also been lobbying heavily against the looming post-Brexit trade tariffs on cars, which would have imposed a 10pc levy if less than 45pc of a car’s value was made locally.
Manufacturers in both Britain and Europe had warned that the policy would hit EVs extremely hard, given the lack of local battery factories.
The European Commission is now preparing to delay the introduction of the cross border tax for three years to allow industry to ramp up local battery production, Bloomberg reported.
Earlier in the day Mike Hawes, SMMT chief executive, had called for “workable trade rules that promote rather than penalise the transition” in a reference to the tariffs.
Mr Hawes decried the slump in EV sales last month, which outpaced even the 9.7pc drop seen in April 2020 when showrooms were closed because of lockdown restrictions.
He said: “Private EV buyers need incentives in line with those that have so successfully driven business uptake.”
Ian Plummer, commercial director at Auto Trader, said: “November’s drop in electric vehicle sales is a sign of what’s to come if the Government doesn’t support the industry in making the transition by incentivising consumers on this journey, as we know private electric car registrations have been lagging that of the fleet sector for a while now.”
Across the car market, sales rose by almost a tenth last month, driven by big companies purchasing fleets of vehicles in bulk.
Commercial buyers have been able to make use of generous tax incentives to fund their purchases of EVs. Meanwhile, ordinary motorists have lost a number of subsidies in recent years.
A £1,500 grant towards the purchase of electric cars was scrapped in June 2022, a year before the industry expected.
Official forecasts for electric car take-up were slashed by almost half last month. Sales of new battery-powered cars were expected to grow steadily until they accounted for 67pc of the market by 2027 under a prediction issued in March.
However, that figure has now been revised down to just 38pc by the Office for Budget Responsibility (OBR), which said the take-up of EVs has been slowing.
Auto Trader has joined other industry voices in calling for VAT to be lowered for public chargers. While domestic electricity attracts just 5pc VAT, charging in public means paying the standard rate of 20pc.
This punishes drivers travelling away from home and car owners without a driveway to charge from.