Car tax changes could help double the amount of electric vehicles on the roads in just two years, according to the Society of Motor Manufacturers and Traders (SMMT).
The group claims that temporarily halving VAT on new fully-electric vehicle purchases would dramatically change the road landscape of the UK.
The SMMT claims the policy would put more than 250,000 extra EVs on the road by the end of 2026 on top of expected growth.
This would see the numbers of EVs soar with ownership set to increase from one million to two million in just 24 months.
Mike Hawes, SMMT Chief Executive, supported the calls as he stressed volumes would dramatically ”increase” if VAT rates were cut.
He added: “It’s taken just over 20 years to reach our million EV milestone – but with the right policies, we can double down on that success in just another two.
“Market growth is currently dependent on businesses and fleets. Government must therefore use the upcoming Budget to support private EV buyers, temporarily halving VAT to cut carbon, drive economic growth and help everyone make the switch.”
Any purchase or lease deal of an electric vehicle is hit with a 20 percent VAT fee from the outset.
However, The SMMT stressed that UK dealers are struggling to sell EVs due to a lack of “significant consumer incentives”.
The experts stressed that it was becoming clearer that private buyers needed more support to make the switch.
SMMT officials feel that slashing VAT fees could cost the Treasury just £1,125 per car on average.
This would be less than the amount of money handed out to motorists who applied for the Plug-in Car Grant but would help some keen buyers get over the line.
The SMMT claims a boost in EV sales would also cut CO2 emissions by more than five million tonnes during that time.
Mr Hawes added: “Manufacturers have been asked to supply the vehicles, we now ask Government to help consumers buy the vehicles on which net zero depends.”
The SMMT feels temporarily cutting VAT rates is no different to existing exemptions such as heat pumps.
Meanwhile, experts suggest that an increase in electric vehicles will have a healthy knock-on effect on the rest of the market.
A boost in new vehicle sales would lead to a major increase in the supply of cheaper second-hand EVs later down the line.
