Plans to give the electric car market a financial boost with a new scrappage scheme or some other incentive have been shelved, much to the frustration of industry experts and thousands of buyers who were waiting for an announcement before placing an order.
Rumours were rife that new version of the scrappage scheme was imminent after it was reported in the Telegraph at the beginning of June. However the government seems to have changed its mind and diverted support to the hospitality industry instead.
Scrappage stimulates sales by encouraging buyers to trade in an older, more polluting car in exchange for a new low emission car. The figure was rumoured to be up to £6,000. Other alternative incentives were thought to include a VAT cut on electric cars.
However, rather than stimulate sales the rumours have been enough to put buyers off, with evidence that customers have been postponing purchases in case they miss out on incentives. What Car? magazine polled 6,000 potential car buyers in early July and reported that a third were waiting for scrappage or some other incentive to be introduced before ordering.
Editorial director Jim Holder said: “What’s needed is a definitive statement one way or the other. While nobody can expect the government to give binding answers in a period of such tumultuous changes, ensuring a period of certainty in which consumers can buy with confidence that they won’t lose out, must be possible.”
Pressure from the industry still remains for the government to introduce a new version of scrappage or some other form of incentive though. Mike Hawes, SMMT Chief Executive said: “Of Europe’s five biggest economies, Britain now stands alone in failing to provide any dedicated support for its automotive industry. Until critical industries such as automotive recover, the UK economic recovery will be stuck in low gear.”
