Electric car buyers could get £6,000 boost from new scrappage scheme
UK motorists could be given £6,000 to swap their old petrol or diesel car for an electric vehicle in a new scrappage scheme, it has been reported.
Prime Minister Boris Johnson is said to be considering implementing such a scheme in order to boost the UK’s automotive industry, which has taken a hit in sales and manufacturing output as a result of the coronavirus lockdown.
Johnson is planning to give a speech on 6 July, the Telegraph reports, where he will set out his agenda for getting the UK’s economy moving again. It’s understood that Chancellor of the Exchequer Rishi Sunak will make a statement, too.
The UK’s last car scrappage scheme was announced in the 2009 Budget under Gordon Brown’s Labour Government and encouraged drivers to swap their older, more polluting cars for newer, cleaner models.
Since then, vehicle electrification has advanced dramatically, while the reputation of diesel cars has taken a battering due to concerns over NOx emissions and the Volkswagen Dieselgate scandal.
In an exclusive interview with Auto Express last year, Mayor of London Sadiq Khan called on motorists to lobby the Government for a national diesel scrappage scheme. This was followed by the AA calling for a £1 billion diesel scrappage scheme to be funded by English cities, as well as central Government.
Commenting on reports of a new scrappage scheme, AA president Edmund King said: “Offering £6,000 to swap a petrol or diesel car for an electric car would be a fantastic move and, should it get the green light, people should take up the deal.
“At the start of the year, we said that scrapping VAT on electric vehicles would be the most influential move to persuade drivers to go electric. A grant like this would be just as good, and would help both car manufacturers and air quality.
“In order to help aid the economic recovery to COVID-19, investment should also be made in gigafactories. This would mean batteries could be developed, built and recycled in the UK to keep our carbon footprint down, while producing highly skilled jobs. We also need more charging points to help convince drivers that they can always get home.”
British car industry bosses have already called on the government to provide support to car buyers to help kick-start the economy.
Speaking to Auto Express, Ford of Britain boss Andy Barrett explained how there's a need for some sort of stimulus that covers both ends of the car industry and gets older, dirtier vehicles off the road.
“Any degree of stimulus has to be fair to the industry – it’s got to be fair to all,” he said. “You can’t just stimulate the low end – and when you think about our manufacturing base in the UK there’s quite a lot of high-end business that comes out of the west midlands – so you’ve got to have something that’s fair to all the industry. It can’t be pro-the high end and there’s got to be a degree of stimulus for the whole industry.
“It’s got to renew the fleet – we want to get the older dirtier vehicles off the road – ideally, we like a scrappage element for the green credentials, but it doesn’t have to be scrappage – it could be scrappage or something similar.
“I think it’s unfair to ask for any degree of stimulus without a matching contribution from the industry.”
Alison Jones, boss of PSA in the UK, which covers Vauxhall, Peugeot, Citroen and DS, confirmed that industry discussions on the best way to boost the car market have taken place and a proposal was being put to government. Talking to Car Dealer magazine she said, “To have a stimulus package, it definitely needs to be around CO2 and not just ultra-low emission vehicles, there are a lot of good ICE vehicles now with low CO2 so that would encourage customers to go into lower CO2 and ultra-low emissions vehicles, and then to have a cap on that value as it needs to help the people that need it most.
“That’s what we’re working with and putting to government alongside industry colleagues and that debate is finishing at the moment.
“I think government is interested in the discussion, whether they will ultimately support it I don’t know, but I think it absolutely needs to be around the environmental credentials we’ve been working to as an industry.”
Jones also hinted that car buyers may be waiting for some sort of scrappage scheme before they buy. “Customers may wait for a stimulus package before making a decision,” she said.
Earlier in the month, Kia Europe boss Emilio Herrera told Auto Express that he thought car sales could get back to normal levels later this year, but only with government support. “We need to make sure that the governments provide a good support plan for the industry otherwise that will not happen,” he said. “The majority of the countries are looking at a support plan: Germany is looking at it, France is looking at it, Spain is looking at it, Italy also. I’m sure the UK is looking at it, discussing with the SMMT to have a support plan for the industry.
“With that, the second half [of the year] will be even better than we think.”
Volvo boss Hakan Samuelsson has also called on governments to focus on subsidising electric vehicles, saying that restarting or enhancing existing incentives on electric vehicles would help manufacturers and respond to consumer trends. “If you do scrappage schemes then you should do what you would do anyhow,” Samuelsson said. “It’d be good to promote new technology – good for governments to support electric vehicles, which are more expensive in the first years.
“I believe that after coronavirus it would be naive to expect everything to return to normal – to think that consumers will come back into showrooms asking for petrol or diesel cars. And if governments in some way subsidise a return to the old world, it’ll be a waste of money. They should use the money to promote new technology, as they were planning to do before coronavirus.”
Vincent Tourette, managing director of Groupe Renault UK & Ireland, also told Auto Express: “There has been huge investment in bringing new Ultra Low Emission Vehicles to market but this current crisis risks slowing down this transition. We would welcome Government support that encourages the sale of new vehicles with the latest emission standards, and with as much emphasis as possible placed on zero and ultra-low emission vehicles in order to fast-track us to our environmental commitments.”
Do you think the government should be doing more to help the car industry? Let us know in the comments below…
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