EV Budget 2020 - Our take!
Now that the dust has settled, and most of the finer details have emerged, we at
wanted to give a quick round up and share our thoughts too.
Benefit in kind
We have had further clarity on benefit in kind rates for all vehicles, but our main focus here clearly is the visibility for zero emission vehicles.
April 2020 - end March 2021 = 0%
April 2021 - end March 2022 = 1%
April 2022 - end March 2023 = 2%
April 2023 - end March 2024 = 2%
April 2024 - end March 2025 = 2%
Plug in Grant (With Immediate effect)
The Incentives applied to the purchase price of the vehicle to artificially reduce cost of them has been extended, but reduced in value to stretch the funding further.
Cars £3,000 (Reduced by £500, and the addition of only cars priced below £50k, not including options)
Large Van/Truck £20,000
Home Charge Grant
A change in value from 1st April 2020 effective on all installations past this point.
Installations up to the 31st March 2020 £500 Grant
Installations after 1st April 2020 £350 Grant
Workplace Charging Grant
A change in value from the 1st April 2020 with a twist!
Workplace charging grant vouchers issued before 1st April 2020 will be held at £500 per socket, up to 20 sockets (Max £10k).
Workplace charging grant vouchers issued on or after 1st April 2020 will be £350 per socket, up to 40 sockets (Max £14k).
Vouchers are valid for 4 months (120 Days)
Funding aimed directly at increasing publicly available infrastructure is always welcomed, and this one is a biggy! Most of this will be distributed into various sub segments of government to administer over the coming years.
£500m funding for rapid charging networks across the UK to be invested over the next 5 years.
Overall, the elements outlined in the budget, and finer details released today is good news for the UK, with some less positive moves in the mix too. Government incentives such as grants and tax breaks are created as economic stimulus, designed to get new ideas, concepts or movements off the ground.
Naturally, as more and more people start to buy into the new concept or idea, part of the governments work is done, they have helped get it moving! Arguably the right move then, is to turn to the private sector, helping them to further stimulate the concept or idea leading to mass adoption.
To put this into perspective, though it has been far from perfect, the level of support for electric vehicle adoption in the UK has been well funded for several years. With the plug-in vehicle grant, home and commercial charging grants along with tax breaks for the commercial sector too.
Now that we have more choice on both the vehicle front and the charging hardware front, it makes sense to start reducing the funding levels, this means that people benefiting from the cost savings of electric vehicles will be offsetting this personally rather than through government handouts, this seems to make sense overall, but of course it will put a few people off.
For those put off by fairly low amounts of funding reduction, this will just lead to delaying the inevitable move to EV, but we think that this is ok at the moment. Rates of adoption are growing rapidly (excuse the pun) and general consumer and commercial interest is reaching fever pitch, so really, this is a big pat on the back to the government, but also the consumers and private sector that have led this change so far.
We think that the biggest pain point that will be felt will be the Plug-in car grant change from £3500 to £3000, for vehicles below £50k , with this happening on the same day as the budget announcement, probably to manage a “run” on claiming the grant.
An important point to note with the vehicles below £50k addition, is that this is the vehicle cost before any options are added, so essentially the "standard price" for the model. This for example means that for Tesla Model 3, both the standard and the long range would qualify, but the performance model wouldn't.
Really, this could have been managed better in our opinion, we appreciate this is supporting the everyday driver in favour of those that can afford it, however, those that can afford it have the potential to decide to continue with their large ICE 4x4 or SUV, surely the better move here would be to include all electric vehicles, given the that the bulk of which would be at the affordable end anyway?!
The commercial charging grant move is a very interesting one, essentially increasing the incentive for large scale rollouts in favour of “a few chargers”. This will help larger employers or operational fleets to put more infrastructure in overall, this must be a good move. One downside though would be that this pushes commercial sites towards the need for increased power, something that load and phase balancing can help with, but not in every case.
Continuing the theme of commercial benefits, the newly announced BIK measures will have a HUGE impact on company car drivers. We now have 5 years visibility of a very low rate with means that company car drivers can see the real benefit over their full period of use of the vehicle. Marrying this with incentives stacked in favor of large scale charging rollouts of up to 40 sockets, and it's clear which direction the company car market is going!
A couple of final thoughts, we love that government promises have materialised with regards to supporting rapid charging hubs with the £500m investment over 5 years, this will go a long way to helping with "range anxiety" and poorly serviced areas. We do need a more joined up approach to this though, contactless credit and debit cards are a good start here.
Now onto the dirty stuff, fuel! Some people have been commenting on the freeze in fuel duty as a negative move. We think this is neutral and overall good for the economy.
We need to manage the move from fossil fuels to EV over a period of time, and specifically not alienate or ostracise segments of society, both domestically or commercially that are not ready to make the leap just yet.
This in essence makes the world go round a little easier for a lot of people, for now at least.
Visit us at www.diode.energy to see how we can help your business make the switch to electric.