Electric cars - London cancels purchase incentives

Complex times for incentives for electric cars: while Italy sees an objectively slow-motion bonus question, especially when compared to that for endothermic cars, Norway reviews tax rates and VAT exemption for premium models and the United Kingdom, it cancels the purchase contributions in full. In particular, London has put an end to the program that guaranteed a contribution of up to 1,500 pounds (over 1,750 euros at the current exchange rate) to anyone who wanted to buy a battery-powered vehicle. The reason for the cancellation? From London they explained that the current subsidy scheme has achieved the goal of giving a boost to the demand for electricity in view of the ban on the sale of endothermic plants scheduled for 2030, while now it is necessary to “refocus” the subsidies on improving infrastructures charging and other product categories such as light commercial vehicles, taxis or motorcycles.

Surprise move. In fact, electric cars now account for around one sixth of new car registrations and their growth has been double-digit for months, while the expansion of the charging network is unable to keep up. Also for this reason, the Minister of Transport, Trudy Harrison, said that “government funding must always be invested where they have the greatest impact”. In addition, the government has stressed that the management costs of electricity guarantee “significant savings” compared to endothermic that exceed the value of the subsidies. Among other things, drivers of battery-powered cars will continue to benefit from other tax benefits, including exemption from stamp duty and favorable corporate fleet rates. However, the initiative took experts and above all representative associations by surprise, also because the end of the incentives was decided a year earlier than the indications on a stop at the end of 2023. The SMMM, the organization of manufacturers and of dealers, spoke of a decision that “sends the wrong message to motorists and the entire industry”.

Fate sealed. However, the subsidy scheme, which has enabled the purchase of nearly 500,000 vehicles since it came into effect in 2011, has already been changed several times. The original 5,000 pounds was reduced to 4,500 in 2016 and 3,500 in 2018. The main changes date back to 2020, when not only another cut to 3,000 pounds was decided, but a maximum limit of 50,000 pounds was also introduced. for the price of the electricity that could qualify for the subsidy. Finally, last year the incentive was lowered first to 2,500 pounds, with a ceiling reduced to 35,000, and then to 1,500. However, the government will continue to provide incentives for applicants prior to cancellation, as in some cases buyers have to wait up to 12 months to receive their car.

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