Car tax updates would help support the electric car market so manufacturers can help invest in new battery technology, says an electric vehicle specialist. Kevin Brundish, CEO of electric battery manufacturer AMTE Power is urging Chancellor Rishi Sunak to introduce further tax breaks.
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He believes extra incentives could bolster confidence in electric vehicles across the UK.
He added: “Next week’s Budget is the Chancellor’s chance to continue supporting the market and show that the country is serious about hitting environmental targets and becoming an attractive place to invest in electric vehicles.
“Manufacturers need a more central position in the supply chain, and by investing in next-generation battery technology, the transition to electrification can be better supported.”
It comes just days after SMMT data revealed overall new car registrations were down 2.9 percent in February.
Figures show total car sales year-on-year for 2020 were 5.8 percent lower than last year in a major worry for the car industry.
However, SMMT figures revealed a major rise in the demand for electric vehicles so far in 2020.
New car sales for fully-electric cars were 243.1 percent higher in February and 217.8 percent up so far throughout 2020.
A total of 6,562 electric cars have been sold so far this year which is over 4,500 higher than the 2,065 purchased at this time last year.
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Despite the sales rise, Kevin Brundish believes consumer confidence in green automotive technology needs “bolstering”.
Fully-electric cars still only accounted for just under three percent of overall car sales as almost two-thirds of vehicles sold were petrol-powered.
To further increase confidence in the market, Mr Brundish has urged the government to incentivise customers and boost infrastructure.
He is also pushing for the government to invest in production for the lithium-ion batteries used in cars to ensure potential extra demand can be met.
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Analysis from AMTE power has shown the transition to electric vehicles could see demand for lithium-ion batteries grow 19 times.
This will see demand outstrip supply which could put many customers off from making the switch.
He said: “Creating a robust UK supply chain for the production of lithium-ion batteries would strengthen the UK’s automotive sectors, making the country an attractive destination for international car-makers.”
Battery supply for the UK manufacturing industry is already struggling to meet the demand for new vehicles, and in response, the creation of full-cycle battery plants should be prioritised instead of relying on large scale manufacturers abroad.
“It is costly and increases carbon footprint to have these batteries imported, especially when the UK has the talent and capabilities at home.”
What are the planned car tax changes
The SMMT has called upon the government to introduce a scrap on all VAT rates on electric cars to dramatically increase take-up of the vehicles.
There are no plans to complete scrap VAT rates on cars but changes are expected which could see the number of electric vehicles rise.
Chancellor Rishi Sunk is expected to rubber-stamp updates to benefit-in-kind rates for company cars.
The changes would scrap the added tax on company vehicles from 16 percent to zero which could dramatically increase take-up of the vehicles.
Campaigners are also frantically pushing to scrap on insurance premium tax (IPT) rates which they say hits the most vulnerable motorists the hardest.
IPT rates are extra charges issued as a percentage of your car insurance rates which often means young and inexperienced motorists are forced to pay a higher rate.
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