Fuel duty freeze could put the brakes on electric car sales, says Close Brothers

Chancellor Jeremy Hunt’s announcement that Fuel Duty will be frozen for a further 12 months could put the brakes on sales of electric vehicles, according to leading funder Close Brothers Motor Finance.

The Budget offers little in the way of incentives for the EV market, and the Chancellor seems to have ignored calls to remove VAT from commercial charge points, bringing them into line with home chargers.

Lisa Watson, director of sales at Close Brothers Motor Finance, said: “Fuel duty could freeze demand for AFVs, as we head towards the 2030 ban of new petrol and diesel cars.”

She continued: “Though previous research has suggested electric vehicles (EVs) could be cheaper in the long run, given current extortionate electricity bills and the previous announcement that electric vehicles will be subject to Vehicle Excise Duty, there seems little incentive to encourage consumers to transition to AFVs.

Watson added: “As well as investing in infrastructure, the government needs to introduce measures to ensure AFVs are a viable option if they are serious about implementing the 2030 ban on new diesel and petrol cars. If they don’t, the road to 2030 will be a bumpy one.”

She welcomed the cut in fuel duty, saying: “The Chancellor’s announcement that the planned 11p Fuel Duty increase has been cancelled and will remain frozen for a further 12 months is good news for motorists across the UK, who continue to grapple with the cost-of-living crisis.

“This will also bring a sigh of relief from dealers, as a rise in Fuel Duty could’ve had a significant impact on consumer demand for second-hand cars. Though fuel prices remain high, this will offer some respite for both consumers and businesses.”