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Tax-free driving may not be enough to stimulate EV sales

  Friday, 13 September 2013

The Government hopes to encourage electric vehicle (EV) sales by offering tax concessions to drivers, although this may not be enough to tempt new car buyers to take the plunge with the new technology.

Despite recent optimism, new EV sales still remain slow, with only 4,000 motorists switching to the ultra-low carbon vehicle so far, despite a number of models being offered by the majority of leading car manufacturers.

In addition to the £5000 Plug-in Car Grant, which gives new EV buyers a large discount off the price of a new vehicle, the Government currently offers drivers a free tax disc, with additional concessions offered to drivers of electric company cars. By providing further incentives, the Government hopes that more buyers will look to electric cars as a cost-effective method of motoring.

Concerns regarding EV range

However, tax incentives will not help to alleviate ‘range anxiety’, which is thought to be the largest reason for EV hesitance among new car buyers. Most EVs have a range of about 100 miles, with the battery depleting and then requiring overnight charging; for longer journeys this simply isn’t feasible, particularly when users require regular access to the vehicle.

The current crop of EVs are therefore only suitable for local driving, where users work and travel within a 30-50 mile radius of their home.

Increasing investment

The Government is hoping to stimulate further research and development into long life batteries through a £10m invention competition. This is part of a £500m investment in new vehicle technology, fronted by the Advanced Propulsion Centre, which is likely to stimulate further investment in new battery development.

Improved range is likely to be developed sooner rather than later, but consumers who wish to buy now ultimately have to pay a premium price, due to higher relative manufacturing costs, for less than optimal technology, which is hardly appealing.

Sales are therefore currently limited to those with a particular environmental conscience or an enthusiasm for new technology. The majority of new car buyers are primarily concerned with price and performance; although the Plug-in Car Grant makes electric cars affordable, the range performance isn’t enough to stimulate demand just yet.

Rival fuel technologies

Other technology appearing is fuel cell power, which utilises hydrogen to generate electric power. Already popular in the United States, vehicles combine hydrogen gas, stored on-board, with oxygen from the atmosphere, into electricity. Although fuel cell is still in early stages of development, it could yet provide a battery-less alternative for electric vehicle power.

The emergence of rival forms of technology makes it even more difficult for consumers to make short term purchasing decisions about ultra-low carbon technology; many will wait until the market selects the best alternative before buying into the idea.

If you do feel it’s time to invest in a new electric vehicle, or are simply looking to upgrade to a new conventional car, why not take advantage of our scrappage and recycling schemes for your existing vehicle, which have a number of environmental benefits.

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