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Expand EV incentives to secondhand purchases, report says

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A report from RAND and auto-parts retailer Halfords has recommended that the government make financial incentives to encourage take-up of electric vehicles (EVs) available to buyers of used as well as new cars.

According to the report, the cost of new battery-powered cars remains too high for many British motorists even accounting for government grants. The 'plug-in' grant scheme gives the funds to the vehicle dealership or manufacturer to manage and the buyer receives the discount. It covers not just cars but also motorbikes, mopeds, vans, taxis, large vans and trucks. For cars, the grant covers 35 per cent of the price, up to a maximum of £3,000.

However, most basic new EVs are currently marked around £18,000, while the average non-luxury model is nearly £30,000.

The report advises the UK government to further extend the incentive to secondhand car purchases, which could bring the cost of an EV down to a more accessible point for many people, in turn boosting adoption of the vehicles. According to the Society of Motor Manufacturers and Traders, the trade body for the automotive industry, 2.17 million used vehicles were sold in the UK between July and September 2020, while only 590,000 new cars were registered in the same period.

Transport Scotland, an agency of the Scottish government, recently introduced interest-free five-year loans to cover the cost of a used EV, up to £20,000.

The report also found that there is a strong regional disparity in EV take-up. Hull, Peterborough and Plymouth have the lowest adoption rates of privately owned, ultra-low emission vehicles of the 27 towns and cities studied (ranging from 0.13 per cent to 0.17 per cent). Meanwhile, the London boroughs of Wandsworth and Barnet have the highest figures at 1.6 per cent and 1.4 per cent respectively.

The study also found, perhaps unsurprisingly given the expense of EVs, a correlation between average household income and private EV ownership.

Andy Randall, managing director of Halfords Autocentres, commented: “Our research indicates that a more targeted approach to EV incentives may be required if the whole country is to join the green transport revolution. We believe this should include financial support for secondhand EV purchases, in the form of interest-free loans or grants, and a renewed focus from central government on targeting the ongoing EV charging infrastructure rollout in low-demand areas.

“This is crucial if we are to reach the ambitious 2030 target for the end of petrol and diesel vehicle sales.”

As part of its “10-point plan” for decarbonisation through a “green industrial revolution”, the UK government has brought forward its ban on the sale of new petrol and diesel vehicles from 2035 to 2030. This will require a massive expansion in battery manufacturing and EV charging infrastructure.

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