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Government urged to reverse falling EV sales by halting company car tax increases

Motors | Published:

British Vehicle Rental and Leasing Association says that company car tax increases over the next couple of years is making fleet buyers hold off on purchases

(PA)

The government has been urged to halt company car tax increases for zero-emission vehicles to reverse a decline in EV sales.

The latest official figures from industry body the Society of Motor Manufacturers and Traders shows all-electric vehicle registrations were down 33.7 per cent across January and February this year compared with 2017 (from 1,493 to 990), which is seen as a worrying decline when EV awareness is at an all-time high.

(Newspress)

Under current legislation, the Benefit in Kind rate for zero-emission vehicles is nine per cent for 2017/18 and will go up to 13 per cent in 2018/19 and 16 per cent in 2019/20. However, this drops dramatically to just two per cent from 2020/21, which is something the BVRLA believes is motivating business buyers to hold off on EVs.

“It’s definitely a concern that the pure-electric market is still in the doldrums – it’s never exactly taken off. All the major growth has come from the plug-in hybrid market – that’s definitely what we’ve seen in the leasing market.

“The plug-in pure-electric segment has not grown massively at all. It is slow growth and it is concerning that it has had this tail-off.”

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Poston added that the government needed to do more as plug-in hybrid sales were not an ideal solution in all circumstances. The BVRLA has written to chancellor of the exchequer Philip Hammond to say that it wants him to accelerate the introduction of the two per cent tax band.

In his Spring Statement yesterday, Hammond made no mention of changes to company car tax, but he announced that a consultation would be launched into the introduction of reduced tax for van drivers opting for cleaner vehicles.

The Treasury has been contacted for comment.

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