The 2024 Autumn Budget includes several measures aimed at supporting the growth of the electric vehicle (EV) sector, with a focus on improving affordability for consumers, incentivising businesses to transition to EVs, and enhancing charging infrastructure. These initiatives are designed to facilitate the widespread adoption of EVs and contribute to the broader objectives of reducing carbon emissions and advancing sustainable transportation in the UK.
Key Budget Measures for the EV Industry and Consumers:
1. Extended EV Purchase Incentives:
Vehicle Excise Duty (VED) First Year Rates: The VED First Year Rates for electric vehicles will remain in place, ensuring that the cost of owning a new EV remains competitive compared to internal combustion engine (ICE) and hybrid vehicles. This will contribute to making EVs more affordable for new buyers.
Company Car Tax (CCT) Reliefs: The company car tax rate for electric vehicles will remain at 2% until April 2028. This provides ongoing support for businesses and fleet owners transitioning to EVs, making electric vehicle adoption more financially viable for corporate fleets and employees using salary sacrifice schemes.
2. Charging Infrastructure Investment:
The budget allocates £200 million for the expansion of electric vehicle charging infrastructure in 2025-26. This funding is focused on increasing the number of charge points, including on-street charging options, addressing one of the key barriers to EV adoption. The expanded infrastructure is particularly crucial for supporting the growing demand for electric vans, especially for businesses with high-mileage vehicles.
3. Extended Capital Allowances for EV Infrastructure:
The government has extended the availability of 100% First Year Allowances for investments in EV charging infrastructure. This allows businesses, including fleet operators, to claim full tax relief on the costs of installing chargepoints in the year of purchase. The extension will incentivize further investment in public and workplace charging networks.
4. Electric Van Incentives:
A £120 million allocation for the plug-in vehicle grant will support the purchase of new electric vans in 2025-26. The funding is intended to reduce the upfront costs of electric vans, making them more affordable for small businesses and larger fleet operators. This initiative is designed to accelerate the transition to electric vans, providing a cost-effective alternative to diesel or petrol vehicles.
5. Support for Sustainability and Clean Energy:
Increased funding for renewable energy initiatives is included in the budget, reinforcing the alignment between the EV sector and the UK’s broader sustainability goals. The measures emphasize the role of EVs in achieving net-zero emissions and reducing the environmental impact of transportation.
6. Corporate Tax Stability:
The corporate tax rate is capped at 25%, providing tax stability for businesses that invest in electric vehicle fleets or related technologies. This allows businesses to make informed decisions about capital expenditures without concern for unexpected tax increases.
7. Long-Term Infrastructure Strategy:
The government has committed to a 10-year plan to expand the national charging network. This strategy aims to eliminate “range anxiety” by ensuring that EV drivers, both in urban and rural areas, have reliable access to charging points. The goal is to make charging infrastructure more evenly distributed, reducing the concerns associated with long-distance electric travel.
These measures in the Autumn Budget 2024 are aimed at making electric vehicles more accessible, increasing the adoption rate of EVs across the UK, and fostering the development of a comprehensive charging network. Through these targeted investments, the government seeks to support the EV industry’s growth and contribute to the achievement of the UK’s environmental and sustainability objectives.
