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Sustainability Newsletter – October 2024
Industry asks government to make EVs more affordable in name of Net Zero and how sustainability works as a selling point
Words by: Dan Trent
Published on 8 October 2024 | 0 min read
When industry bodies like the Society of Motor Manufacturers and Traders (SMMT) and carmakers lobby the government for initiatives to make electric cars more affordable are they really motivated by sustainability concerns, or is it a commercial calculation driven by sales targets and fear of financial penalties for not selling enough battery electric vehicles?
It could be argued manufacturing cars creates more carbon than it saves, and the last thing the world needs is more vehicles on the road. But it’s clear de-carbonising road transport plays a huge part in wider net zero ambitions. And in a letter to the government from the SMMT and signed by UK bosses of various vehicle manufacturers there’s a growing call for a new round of buying incentives to make electric cars more affordable, based on the idea consumers respond better to carrots than sticks. “Your government and our industry remain committed to delivering Net Zero,” says the SMMT’s letter to chancellor Rachel Reeves. “We also share the belief that the transition can drive economic growth. But it will only do so if the conditions are right and the consumer can afford it.”
It could be argued manufacturing cars creates more carbon than it saves, and the last thing the world needs is more vehicles on the road. But it’s clear de-carbonising road transport plays a huge part in wider net zero ambitions. And in a letter to the government from the SMMT and signed by UK bosses of various vehicle manufacturers there’s a growing call for a new round of buying incentives to make electric cars more affordable, based on the idea consumers respond better to carrots than sticks. “Your government and our industry remain committed to delivering Net Zero,” says the SMMT’s letter to chancellor Rachel Reeves. “We also share the belief that the transition can drive economic growth. But it will only do so if the conditions are right and the consumer can afford it.”
It's an issue we’ve reported on before, but given fresh impetus and focus in the SMMT letter and resulting media coverage, this including a spot on Radio 4’s Today programme for Auto Trader’s Editorial Director Erin Baker to share her insight on the topic.
As discussed previously and in Erin’s appearance on Radio 4, the tax incentives offered to company drivers and fleets mean they account for over three-quarters of electric car sales. Proof incentivisation works, says the SMMT, and the reason it wants to see the same financial encouragement for private buyers. As such it’s asking for a temporary reduction in VAT on electric cars, along with an exemption from the punishing ‘premium car’ VED/’road tax’ rates for cars over £40,000 on the basis this disproportionately hits electric vehicles and makes them less attractive to buy. A reduction in VAT on energy from public chargers to bring this into line with the cheaper rates those with home chargers benefit from would also help, says the letter. A reasonable counter-argument might be that the industry needs to improve availability of affordable electric cars, and reduce its dependence on higher-margin premium models. That may be happening, with the arrival of products like the Leapmotor T03 we drove recently and other affordable electric cars coming to the market like the Dacia Spring, VW ID.2all, Citroën ë-C3, Hyundai Inster and more. With the new Labour government still finding its feet and chancellor Rachel Reeves balancing competing demands as she prepares her first budget it will be interesting to see whether she is receptive to the industry’s call, and willing to accept some loss in tax revenue in the name of sustainability.
As discussed previously and in Erin’s appearance on Radio 4, the tax incentives offered to company drivers and fleets mean they account for over three-quarters of electric car sales. Proof incentivisation works, says the SMMT, and the reason it wants to see the same financial encouragement for private buyers. As such it’s asking for a temporary reduction in VAT on electric cars, along with an exemption from the punishing ‘premium car’ VED/’road tax’ rates for cars over £40,000 on the basis this disproportionately hits electric vehicles and makes them less attractive to buy. A reduction in VAT on energy from public chargers to bring this into line with the cheaper rates those with home chargers benefit from would also help, says the letter. A reasonable counter-argument might be that the industry needs to improve availability of affordable electric cars, and reduce its dependence on higher-margin premium models. That may be happening, with the arrival of products like the Leapmotor T03 we drove recently and other affordable electric cars coming to the market like the Dacia Spring, VW ID.2all, Citroën ë-C3, Hyundai Inster and more. With the new Labour government still finding its feet and chancellor Rachel Reeves balancing competing demands as she prepares her first budget it will be interesting to see whether she is receptive to the industry’s call, and willing to accept some loss in tax revenue in the name of sustainability.
Certainly, consumers place increasing importance on the topic as they come to choose their cars, and through our attendance of various launches over the past months it’s interesting to see which are doing the better job of publicising their efforts. Or, more pertinently, communicating them successfully to customers.
One example came on the recent launch for Leapmotor, the new Chinese EV brand to be sold alongside others from the wider Stellantis group like Peugeot, Citroën, Vauxhall, Jeep and Fiat. The T03 we drove is one of the cheapest electric cars on the market, and opens the door for customers who previously couldn’t afford one. But, beyond that, Leapmotor’s claims of prioritising sustainability in the manufacturing process couldn’t be backed up in any detail when we invited senior execs to expand on the topic.
One example came on the recent launch for Leapmotor, the new Chinese EV brand to be sold alongside others from the wider Stellantis group like Peugeot, Citroën, Vauxhall, Jeep and Fiat. The T03 we drove is one of the cheapest electric cars on the market, and opens the door for customers who previously couldn’t afford one. But, beyond that, Leapmotor’s claims of prioritising sustainability in the manufacturing process couldn’t be backed up in any detail when we invited senior execs to expand on the topic.
Contrast this approach to BMW, which has been quick to realise the publicity value of noise about its environmental initiatives, be that inviting Arnold Schwarzenegger to flick the switch from gas to sustainable wood chip biofuel power in a plant in his Austrian homeland or publicising its recycling facility for test vehicles and prototypes that would otherwise have been crushed once their purpose was served. BMW is winning here by making its sustainability claims tangible and easy for consumers to understand, the fact the interior trim on a Mini Countryman like the one we’re running on long-term test uses plastics from over 130 recycled drinks bottles easier to get your head around than Leapmotor’s claim of accreditation to a regulatory sustainability standard only industry watchers would really understand.
See also Renault and the Emblème ‘demo car’ due at the Paris motor show this month, this showcasing a project to slash ‘cradle to grave’ carbon emissions over a car’s lifecycle from manufacture to end-of-use recycling by up to 90 per cent. A complex topic explained in simple terms with an eye-catching show car, and accompanying facts and stats about Renault’s ongoing sustainability efforts with its existing models. If sustainability matters in your buying choices (as it does to an increasing number of people) the brands that can communicate their green cred in simple terms will be the ones to succeed. Something newcomers like Leapmotor need to get on board with if they are to make their products stand out for more than just cheapness.
See also Renault and the Emblème ‘demo car’ due at the Paris motor show this month, this showcasing a project to slash ‘cradle to grave’ carbon emissions over a car’s lifecycle from manufacture to end-of-use recycling by up to 90 per cent. A complex topic explained in simple terms with an eye-catching show car, and accompanying facts and stats about Renault’s ongoing sustainability efforts with its existing models. If sustainability matters in your buying choices (as it does to an increasing number of people) the brands that can communicate their green cred in simple terms will be the ones to succeed. Something newcomers like Leapmotor need to get on board with if they are to make their products stand out for more than just cheapness.
Previous Sustainability Newsletters:
• Sustainability newsletter – September 2024 | Road charging for electric cars, UK’s car manufacturers clean up their act and VW explores hemp-based bio interiors
• Sustainability newsletter – August 2024 | Is stimulating electric car sales ‘green’ and how improved charging infrastructure is helping with the great summer getaway • Sustainability newsletter – July 2024 | Hidden carbon cost of tech, Volvo pushes for more recycled plastics and Renault secures greener supply chain for EV batteries • Sustainability newsletter – June 2024 | Farewell chrome plating, bravo for Renault’s recycled interiors and a cheer for the … circular economy for recycled tyres • Sustainability newsletter – May 2024 | Lithium is key in the production of electric car batteries, but where does it all come from and at what cost? • Sustainability newsletter – March 2024 | The importance of renewable energy in making sure electric cars really are the green choice, and one Dutch couple’s mission to prove it! • Sustainability newsletter – January 2024 | French act on heavy SUVs and embedded CO2 of imported electric cars, BYD plans European factory and Nio opens battery swapping centres • Sustainability newsletter – December 2024 | Vauxhall electrifies Britain’s streets, a second life for electric car batteries and recycled Alcantara seat fabric combines luxury and sustainability • Sustainability newsletter – November 2023 | Costs for EV batteries fall, funding for UK-sourced lithium project, GM goes renewable and Lynk & Co commits to life cycle CO2 audits • Sustainability newsletter – October 2023 | Costs for EV batteries fall, funding for UK-sourced lithium project, GM goes renewable and Lynk & Co commits to life cycle CO2 audits • Sustainability newsletter – September 2023 | Erin Baker shares her thoughts on the UK's changing net zero targets and delaying the 2030 ban for new petrol and diesel cars. • Sustainability newsletter – August 2023 | Zapmap reports increased charger installations, Lime's e-mobility revolution and Nissan's autonomous driving • Sustainability newsletter – July 2023 | Public charging network expands, hydrogen back on the agenda and choosing green tyres • Sustainability newsletter – June 2023 | BMW helps electrify the UK’s national parks and Kia ditches leather across its range of cars • Sustainability newsletter – May 2023 | What upholstery will you be choosing for your next car - leather or pleather? • Sustainability newsletter – April 2023 | Polestar’s ‘moonshot’ for a zero emissions car and a look into synthetic fuels as a possible lifeline for internal combustion classics • Sustainability newsletter – February 2023 | Our regular sustainability round-up continues with a look at some new recycled materials this month, all of which could be in your car soon • Sustainability newsletter – January 2023 | Eco awareness is driving more and more car buying decisions for a variety of reasons -here we celebrate those doing it right!
• Sustainability newsletter – August 2024 | Is stimulating electric car sales ‘green’ and how improved charging infrastructure is helping with the great summer getaway • Sustainability newsletter – July 2024 | Hidden carbon cost of tech, Volvo pushes for more recycled plastics and Renault secures greener supply chain for EV batteries • Sustainability newsletter – June 2024 | Farewell chrome plating, bravo for Renault’s recycled interiors and a cheer for the … circular economy for recycled tyres • Sustainability newsletter – May 2024 | Lithium is key in the production of electric car batteries, but where does it all come from and at what cost? • Sustainability newsletter – March 2024 | The importance of renewable energy in making sure electric cars really are the green choice, and one Dutch couple’s mission to prove it! • Sustainability newsletter – January 2024 | French act on heavy SUVs and embedded CO2 of imported electric cars, BYD plans European factory and Nio opens battery swapping centres • Sustainability newsletter – December 2024 | Vauxhall electrifies Britain’s streets, a second life for electric car batteries and recycled Alcantara seat fabric combines luxury and sustainability • Sustainability newsletter – November 2023 | Costs for EV batteries fall, funding for UK-sourced lithium project, GM goes renewable and Lynk & Co commits to life cycle CO2 audits • Sustainability newsletter – October 2023 | Costs for EV batteries fall, funding for UK-sourced lithium project, GM goes renewable and Lynk & Co commits to life cycle CO2 audits • Sustainability newsletter – September 2023 | Erin Baker shares her thoughts on the UK's changing net zero targets and delaying the 2030 ban for new petrol and diesel cars. • Sustainability newsletter – August 2023 | Zapmap reports increased charger installations, Lime's e-mobility revolution and Nissan's autonomous driving • Sustainability newsletter – July 2023 | Public charging network expands, hydrogen back on the agenda and choosing green tyres • Sustainability newsletter – June 2023 | BMW helps electrify the UK’s national parks and Kia ditches leather across its range of cars • Sustainability newsletter – May 2023 | What upholstery will you be choosing for your next car - leather or pleather? • Sustainability newsletter – April 2023 | Polestar’s ‘moonshot’ for a zero emissions car and a look into synthetic fuels as a possible lifeline for internal combustion classics • Sustainability newsletter – February 2023 | Our regular sustainability round-up continues with a look at some new recycled materials this month, all of which could be in your car soon • Sustainability newsletter – January 2023 | Eco awareness is driving more and more car buying decisions for a variety of reasons -here we celebrate those doing it right!