MHA | The Chancellor must support widespread Electric Vehicle adoption
Car factory production line

The Chancellor must support widespread Electric Vehicle adoption

Alastair Cassels · Posted on: November 13th 2023 · read

What does the Automotive industry need from the Autumn Statement 2023?

The Automotive sector faces a crucial negotiation regarding the impending 2024 rules of origin legislation. If implemented, these regulations could slap a 10% tariff on vehicles falling short of the domestically sourced content minimum (45% of the vehicle and 60% of the battery).

For automakers like Vauxhall, Nissan and Toyota, whose electric vehicle subdivisions rely on imported batteries, the legislation is potentially very onerous. It also threatens to hike prices on European electric imports, at a time when affordable EV’s are essential to boost public demand and to help the government meet with the zero emission vehicle (ZEV) mandate.*

From a domestic perspective, manufacturing urgently needs new incentives to bolster battery production and increase competitiveness for UK produced vehicles. If the UK is to meet its 2050 Net Zero goals, it will have to enhance its energy storage capacity to help load balance the grid, maximise renewable output, and reduce energy bills.

The Chancellor must also grasp the nettle and reduce VAT on public EV charging to 5%, bringing it in line with domestic energy rates, along with tax breaks for private EV buyers. Despite the PM delaying the internal combustion engine (ICE) vehicle ban, the ZEV mandate remains unchanged in its mission for accelerated EV adoption. While the VAT level on public charging remains unchanged, it threatens to seriously undermine the feasibility of widespread EV adoption.

*This requires 80% and 70% of new cars and vans sold by 2030 to be EVs respectively.

For more insights on potential measures from the Chancellor in his Autumn Statement, view our full Wishlist article.

For further guidance

For further guidance on any of the tax measures discussed in this article, please contact your usual MHA advisor or contact us

Read the latest Autumn Statement 2023 commentary on our dedicated hub, where we will be providing resources, advice and practical guidance on what any new tax measures mean for you and your business, to help you prepare for and manage their impact.