Autumn Budget 2017: Big buzz for electric cars but diesel driven out
AB17: Big buzz for electric cars but diesel driven out
Justin Benson, Head of Automotive at KPMG, comments on the Chancellor's decision to invest in electric cars.
Justin Benson, Head of Automotive at KPMG, commented:
“With the tax on diesel cars and some of the Chancellor’s proposals on electric vehicles (EV), the Government clearly wants to encourage consumers to buy more environmentally friendly vehicles. However, while EV grants go some way to making it easier to sell electric vehicles, the elephant in the room is the cost of batteries: this remains the largest single cost of new EVs. It would therefore be good to see more help for low emission technologies, such as enhancing R&D tax credits for battery and hydrogen delivery technology.
“From April 2018 any cars that don’t meet EURO6 standards will be subject to the higher tax bands, so most cars made pre-2015 will be affected. Recent reports confirm that new and used diesel cars have been reducing in price. Although this change may encourage some consumers to purchase new lower emission cars, it will mean further downward pressure on new and used diesel car prices, thereby reducing future investment in an industry already suffering from significantly reduced levels of investment due to uncertainty over Brexit.”
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