Electric Vehicle Government Funding Support

NFDA proposes the Government provide the following funding opportunities and tax exemptions to help accelerate the growth of Electric Vehicles:

  • Government to provide energy providers (and if necessary, Local Authorities) with funding to reinforce local grid. The burden of cost to upgrade the grid must not be put on private business.
  • The Introduction a centralised monetary fund, similar to the Homecharge Grant, which private business can apply for to enable them to invest in rapid charge infrastructure.
  • Extending grants for electric cars, vans and motorcycles significantly. The Plug-In Car Grant should be guaranteed beyond its current expiry date in 2020.
  • Government should reduce the VAT on electric vehicles in line with electricity. Once the UK leaves the European Union, this should be reduced to 5%.
  • The current exemption of fuel duty for electric vehicles, including hydrogen fuel cell vehicles, should continue until electric vehicles reach a significant percentage of the parc. This should be maintained for Car Fuel Benefit Charge and Van Fuel Benefit Charge as well.  An exemption should also remain in place for Vehicle Excise Duty (VED).

Barriers to Entry

NFDA cites the following as the most significant barriers preventing the large-scale uptake of Electric Vehicles (EVs):

In December 2017, NFDA commissioned a survey of 1,000 consumers looking at their attitudes towards electric cars and the adoption of electric cars. This identified three main barriers:

Cost of Electric Cars

  • 59% of consumers see the current price levels of electric cars as a barrier to purchase 
  • 56% of consumers who see the cost of electric cars as a barrier would require prices to decrease below the cost of a conventionally powered car of a similar level of luxury, again suggesting they require a cost advantage for most consumers.
  • More positively, 20% of consumer who see cost as a barrier, simply would like electric car prices to drop, even if they are still higher than a conventional equivalent.

Charging Electric Cars

  • 53% of consumers see access to charging as a barrier to purchasing an electric car
  • The vast majority, 82%, of consumer who think access to charging is a barrier view the lack of charging points in public places as to why there is not enough access to charging. For 56% lack of off street parking is a problem and 45% at work charging.

Battery range of Electric Cars

  • 52% of consumers see battery range as barrier to the adoption of electric cars
  • 51% who consider range an issue, would like to be able to drive over 250 miles before recharging. Conversely 49% would be satisfied by an electric car with a 250-mile range (Renault Zoe, currently has an official range of 250 miles).  

No barrier to adoption

  • 8% of consumer see no barriers to buying an electric car
  • only 1% of consumers who know what type of car they next plan to buy, have planned to purchase an electric vehicle and 2% for plug-in hybrids. This suggests that even customers who have no barriers to owning electric cars, still mostly prefer conventional cars.

Business barriers to the adoption of EVs:

  • Businesses are being discouraged from selling electric vehicles because of burdensome administrative processes, which easily penalise vehicle retailers. When an EV is sold, the vehicle retailer must subsequently apply for the grant amount. Once the grant is approved, the retailer can register the car and provide this to the customer. Two problems become apparent because of this system:
    • Vehicle retailers can wait for up to 12 weeks to receive the grant after it has been approved and the customer has taken the car. This leaves the business with a financial deficit and impacts cashflow issue. This is preventing retailers from focusing on electric vehicles when they are under cashflow pressure, which is often due to the business having small margins. In turn, this constrains the growth of the market.
    • The grant cannot be given retrospectively. Any administrative errors result in the retailers being financially penalised since the customer already has the discounted vehicle.

NFDA Solutions

NFDA proposes the following solutions in order to overcome these barriers:

  • Charging must be convenient and accessible. The majority of charging required will be home charging. As a result, residential areas must have a sufficient electricity supply and residential charging infrastructure installed. Whilst public charging is essential, it is not relied upon to the same extent as home charging.
    • Top Five Large Towns and Cities (Peterborough, Slough, Birmingham, Swindon and Milton Keynes) that have the most successful adoption of plug-in cars, on average, have only one charge post for every 303 plug-in cars. In contrast, the average for all UK large towns and cities, is 50 plug-in cars per one charge post. 
    • Conclusion: areas with the highest penetration of plug-in cars, do not necessarily have the largest number of public charging facilities.
  • Government must not rely solely on the investment of the private sector to develop and provide electric vehicle infrastructure. Government must be responsible for maintaining a financial contribution to research, development and the implementation of charging facilities for electric vehicles.
  • To ensure that the monetary impact on central Government is manageable, Government funding should be provided to authorities gradually and based on the rate of EV uptake in the local areas. This should consider the current EV population in the area, the rate of uptake and where possible, projected future uptake.
  • Grants to purchase electric vehicles, should be linked to the Driver and Vehicle Licensing Agency’s (DVLA) registration system. All qualifying plug-in vehicles should be recorded in the DVLA Automated First Registration and Licensing (AFRL) system and when a registration occurs the grant payment is immediately triggered and the retailer is not left with a lengthy cashflow deficit. Instead of having effectively two registration procedures for the car as is currently experienced (first through the plug-in grant registration and secondly DVLA registration) they are condensed into one (the DVLA registration through AFRL) and this triggers the grant. Industry are already accustomed to using the AFRL and this would prevent administrative errors which financially penalising businesses.

Successful Council Measures for Electric Vehicle Uptake

NFDA conducted a freedom of information request (October – December 2017) of Council’s around the UK with the highest adoption rate of Electric Vehicles; looking at similarities between measures which enable/encourage Electric Vehicle adoption. As a result, NFDA advises Council’s to adopt the following measures to increase Electric Vehicle uptake. Government should actively promote these measures:

 Active promotion and awareness:

  • Showcase Electric Vehicles and Plug-in Hybrid Electric Vehicles at as many events as possible. This can be done by inviting local car dealers and charge point installers to attend events and showcase/educate residents and business about products.
  • Engage via blogs, emails, newsletters and website to promote Electric Vehicles and Plug-in Hybrid Electric Vehicles with local residents and businesses.
  • Adopt Electric Vehicles and Plug-in Hybrid Electric Vehicles into the council’s own fleets and brand these as EVs/PHEVS.

Innovative policies:

  • Introduce a Local Development Order which grants planning permission ‘up front’ for all existing garages and identified supermarkets and car parks to install charging points. 
  • Make installing charging points a key consideration for all new planning developments. 
  • Free parking permits at council controlled parking for Electric Vehicles and Plug-in Hybrid Electric Vehicles registered to residents.
  • Allowing Electric Vehicles and Plug-in Hybrid Electric Vehicles to drive in bus lanes without penalty.
  • Charge points located at council’s park and ride locations should provide free electricity to all plug-in vehicles. 
  • Councils should have regular contact with local dealers to track trends in the purchase and leasing of electric vehicles and to identify barriers to the uptake and use of Electric Vehicles and Plug-in Hybrid Electric Vehicles.
  • Where possible, offer grant schemes to support installing charging points
  • Local authorities to share experiences and success stories of encouraging the uptake of Electric Vehicles and PHEVs with other local authorities
  • Encourage councils to actively research relevant funding streams and for Office for Low Emission Vehicles (OLEV) to actively promote all the grants it offers to councils.

 In addition, NFDA recommends the following:

  • Local authorities to share experiences and success stories of encouraging the uptake of Electric Vehicles and PHEVs with other local authorities
  • Encourage councils to actively research relevant funding streams and for Office for Low Emission Vehicles (OLEV) to actively promote all the grants it offers to councils.