Labour under pressure to lower net zero targets in wake of EV shambles
Labour is under pressure to lower its net zero targets in the wake of a “shambolic” electric car discount scheme.
Car dealers and industry experts have lambasted this month’s Electric Car Grant (ECG) rollout.
Heidi Alexander, the Transport Secretary, said the grant would give motorists up to £3,750 off the price of a new electric vehicle (EV).
Yet, nearly a fortnight on from the scheme going live, there are no EV models eligible for the full discount that can be bought by the public.
Some EVs can be bought with a partial £1,500 discount – a figure that has prompted critics to demand more financial support from the Government.
Car dealers say the partial discount is stalling sales of EVs because customers are holding off on purchases to see if their model will be offered with a discount.
‘Shambolic’ scheme
Dealerships are calling on the Government to simplify the rules.
Peter Smyth, the director of car dealer group Swansway, called the ECG scheme “shambolic” and said it was causing “too much confusion” in showrooms.
He added: “There should have been a simple VAT cut on all electric cars under £37,000 which would have been simple to implement and, importantly, available from the day of launch.”
Neil McCue, a director of English car dealer group Snows, said the ECG scheme was “ill thought-out”.
He said: “We have seen customers holding off buying electric cars in July, and we’re seeing it again in August. They’re all asking for their £3,750 discount and we can’t give it to them.
“Why has this been so complicated? It shouldn’t have been linked to emissions for manufacturing – the idea here was to boost the sales of EVs and you can only do that with a simple scheme that covers them all.”
To qualify for the full discount, carmakers must sign up to green targets set by a private company part-funded by the Ikea Foundation, the charitable arm of the Swedish furniture retail empire.
Science Based Targets Initiative Ltd then sells manufacturers a certificate saying that their greenhouse gas emissions reduction targets have been met.
If they have not yet met these targets, car makers’ products are only eligible for partial discounts under the Government’s ECG scheme.
Unveiling the scheme, Ms Alexander said: “The amount of grant available per vehicle will depend on the level of emissions associated with production of the vehicle.
“Emissions from vehicle production are assessed against the carbon intensity of the electricity grid in the country where vehicle assembly and battery production are located.”
The grant was introduced on July 16, offering a two-tier discount scheme for electric cars under £37,000.
Band 1 cars get the full £3,750 relief and Band 2 models receive a reduced £1,500 rate, based on sustainability criteria. However, only 17 cars are available for grants, and all of them are in Band 2.
The new Nissan Leaf will be eligible for the full £3,750 grant, but it is not yet on sale.
The Society of Motor Manufacturers and Traders (SMMT) said new car sales in July were down 5 per cent and blamed “external factors”.
Mike Hawes, the chief executive, called for “consumer certainty” around the grant.
James Baggott, editor of Car Dealer Magazine, said: “We are hearing from dealers across the country that this scheme is having the opposite effect of what the Government intended. The delay in announcing eligible cars is causing electric car sales to stall.
“While we applaud the Government for finally doing something to incentivise electric car sales, the details of this scheme really should have been hammered out behind closed doors before it was announced to avoid the confusion we’re now facing.”
Richard Holden MP, the Conservative shadow transport secretary, said: “First Labour hands £650 million of taxpayers’ money to foreign car companies for vehicles made overseas, and now they’ve botched their Electric Car Grant so badly that not a single car is eligible for the full discount.
“Labour’s botched scheme has stalled electric car sales, sown chaos for dealers, left customers in limbo, and pushed British manufacturing into the slow lane, all while piling more pressure on taxpayers already facing billions in tax rises after their disastrous autumn budget.
“The Government must change course to protects jobs, back British manufacturing, and spare taxpayers from being crushed by arbitrary deadlines.”
A Department for Transport spokesman said: “We expect dozens of models to be eligible for the Electric Car Grant with 17 models announced to date and many more to come, providing a substantial boost for the industry and saving drivers thousands of pounds.
“The list of eligible models is published online and regularly updated with discounts available for the public at dealerships.
“We have also published comprehensive guidance for manufacturers, who we will continue to work with alongside dealers to help more of their customers access the grant.”
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