Car scrappage scheme ‘essential’ before ban

Drivers will need incentive to go electric as vehicles are devalued thanks to 2030 deadline, says MP

‘They will hold on to their petrol and diesel cars longer than normal and that is worse for the environment’

THE Government has been told it must do more to help drivers transition to electric vehicles – including scrappage schemes – as a ban on new combustion engines comes in from 2030.

The move to bring forward the ban by 10 years was welcomed by environmental groups and industry bodies as a clear signpost to help boost the market for electric vehicles.

However, there were warnings that it could cause the second-hand market in combustion engines to collapse and leave many people unable to afford to make the switch.

Julian Knight, the Conservative MP for Solihull, urged ministers to implement a scrappage scheme.

The chairman of the digital, culture, media and sport committee said that the Government needed “to be aware it’s j ust devalued everyone’s cars and slashed any incentive to buy new in the next 10 years. We need a proper scrappage scheme that takes account of that”.

Edmund King, president of the AA, said of a means- tested scrappage scheme: “The Government doesn’t necessarily lose money because part of the scheme is to then buy a new car – and the Government gets the VAT.”

Although studies showed that electric cars were cheaper over their lifetime when factoring in fuel prices, the up-front cost of an electric vehicle, which start from around £15,000, put them beyond the reach of many potential customers.

Mr King warned that the policy could have unintended negative consequences as people avoided having to make the switch, prolonging the lives of some of the most polluting models.

“The irony is, they will hold on to their petrol and diesel cars longer than they normally would and that is worse for the environment,” he said.

He added that about half of the emissions found in city centres was caused by just 10 per cent of older, poorly maintained vehicles.

“It’s fine if 70 per cent of the other people have clean vehicles, but that 10 per cent is still causing quite a problem. So it’s not just as simple as giving a 2030 date,” he said. Mike Hawes, the chief executive of the Society for Motoring Manufacturers, said: “Success will depend on reassuring consumers t hat t hey can afford t hese new technologies”.

He said his society was calling for more purchase incentives after the Government had promised £582 million in grants to encourage people to make the switch.

It also wants VAT exemptions for all zero-emission capable cars, which it said would reduce the up-front price of a family electric car by £5,500 on average, and for an electric SUV by up to £9,750.

Sales of used combustion engine cars will still be permitted after 2030, and there are no plans to outlaw their use.

But there are concerns that rising disincentives for petrol and diesel drivers, such as low-emission zones, will significantly increase the cost of driving a combustion engine over the next 10 years.

Adrian Dally, head of motor finance at the Finance and Leasing Association, called for a green finance guarantee to help potential electric vehicle drivers.

He said: “Electric vehicles will remain more expensive to buy than [combustion engine] vehicles for some time yet, which is why we are looking to the Government for a green finance guarantee to support the transition.”