Labour to spend millions on electric car handouts

Telegraph

a day ago

Labour will unveil £700m of taxpayer-funded subsidies to encourage the public to buy more electric cars.
Heidi Alexander, the Transport Secretary, will this week announce grants for drivers to help cover the upfront cost of a new vehicle as well as more cash for charging points.
Her intervention comes amid growing concern within the Government that flagging sales of battery-powered cars are putting net zero targets at risk.
Labour has kept Conservative plans to ban the sale of new petrol and diesel cars from 2030, which will force motorists to switch to electric-powered vehicles.
But many drivers have been put off by high upfront costs, with battery-powered models typically costing thousands more than their petrol counterparts.
The average price of a new electric vehicle in Britain is just under £50,000, more than double the cost of a typical petrol car at £22,000.
Electric vehicles have also been plagued by high depreciation, losing their value faster than petrol and diesel cars because their batteries degrade.
The Transport Secretary told The Telegraph: 'We do know that the high upfront purchase cost of EVs is something that people are wary about.
'I think we've got to be honest and say there are a lot of people out there who think that EVs are just for the very wealthiest.
'We also want to really move away from people having range anxiety, to people having range awareness and knowing that they're going to be able to make the journeys that they want to make.
'It's right that the Government thinks in the round about what we can do to tackle both of the issues, on charging and on the upfront cost of purchase.'
This week, ministers will announce two new taxpayer-funded schemes to make it cheaper to buy an electric car in an attempt to stimulate sluggish demand.
Ms Alexander is expected to unveil a new £640m grant scheme which will give people money off the down payment on a new battery-powered vehicle.
The Telegraph understands that the plan, to be published on Tuesday, will see the highest levels of grants available for UK-manufactured vehicles.
It will favour Nissan in particular, which is planning to make the next generation of Leaf electric vehicle at its plant in Sunderland from next year.
There will be a cut-off point at which the grant can no longer be claimed, with buyers of more expensive models, like Teslas, not expected to be eligible.
Ministers revive Tory subsidy programme
Any subsidy scheme may take the form of the Government underwriting loans, which drivers could take out to help them cover the upfront payment.
The programme will effectively revive a system of cash handouts which were previously available to EV buyers before being axed by the Tories in 2022.
Under that scheme, drivers got £1,500 off the price of a new electric car. Since then, grants have only been available for vans, taxis, trucks and motorbikes.
At the time, ministers said the subsidies were no longer needed because they had 'successfully kickstarted the UK's electric car revolution'.
Since then, EV sales have continued to grow strongly, but they have been increasingly fuelled by fleet purchases rather than private demand.
Recent figures showed that the number of enquiries about new electric cars from ordinary consumers has fallen 65 per cent year-on-year.
There are just over 1.5m EVs on the UK's roads at present, records show, compared with 19.2m petrol and 11m diesel vehicles.
Motability's expanding role in EV market
One of the major fleet buyers of electric cars is the taxpayer-funded Motability Scheme, which leases cars to people who receive disability benefits.
The controversial programme, which has been branded Britain's biggest 'benefits scandal', has recently doubled its fleet of EVs to around 70,000 vehicles.
On Sunday, Ms Alexander will also unveil £63m in funding to bankroll the installation of tens of thousands of new charging points across the country.
Under the plans, councils will be given cash to install cables under roads where the houses do not have driveways to allow for on-street charging.
It will mean that, for the first time, many EV owners who live in terraced houses will be able to use cheaper domestic electricity rates to charge their cars.
There will also be extra cash to increase the number of electric ambulances, and road signs will be put up on motorways and A-roads to advertise charging stations.
Put together, the two schemes will represent an investment by the taxpayer of around £700m over the next four years in boosting EV sales.