Summary
- SMMT urges the UK government to drop plans for an EV-specific road-pricing regime and to reconsider ending Employee Car Ownership (ECO) schemes.
- The trade body warns these proposals would depress new car demand, undermine investor confidence, and clash with the government’s industrial strategy ahead of the Budget.
- It calls for measures that stimulate consumer demand—especially for EVs—to keep the UK competitive and support a target of 1.3 million vehicles produced annually by 2035.
What SMMT Wants in the Budget
- Policies that lower the total cost of ownership for EVs and expand charging access.
- Support for both fleet and retail buyers to accelerate mass-market adoption.
- Alignment of fiscal measures with the £2.5 billion automotive growth fund and the wider Industrial Strategy.
Key Concerns Raised
- EV-only road pricing: A pay-per-mile tax targeting EVs would suppress demand and send a negative signal to consumers, which SMMT says no grant could offset.
- Ending ECO schemes: Could reduce employee access to new vehicles and slow fleet renewal, weakening both new and used markets.
- Investor sentiment: Softer domestic demand risks shrinking the market, deterring capital deployment, and influencing where manufacturers place next-generation EV programs and components.
- Policy coherence: Measures that raise zero-emission ownership costs or remove established benefits run counter to goals on decarbonization and manufacturing strength.
Context and Industry Signals
SMMT acknowledges supportive government actions—trade deals, regulatory flexibilities, and an automotive growth fund—while warning that fiscal proposals must not blunt EV adoption. With rising global trade barriers and intensified competition, the group frames 2025 as an inflection point that requires a stronger government–industry partnership.
Demand, Infrastructure, and Mandates
Manufacturers and suppliers have invested heavily in EV pipelines, yet SMMT says demand and charging infrastructure lag behind, even as the ZEV mandate requires higher zero-emission sales. Clear, consistent signals on demand, infrastructure, and taxation are seen as crucial for moving from early adopters to mainstream buyers.
Why It Matters for the Budget
- Stable demand at home anchors production decisions, supports supplier networks, and encourages long-term plant and technology investment.
- Consumer confidence is the lever that connects public policy to factory output and skilled jobs, maximizing the impact of public funds.
- Clarity now could safeguard momentum toward the 1.3 million-vehicle output goal by 2035.
Outlook
The sector will scrutinize the Chancellor’s plans for signals that the UK will remain a competitive EV manufacturing base—prioritizing measures that bolster demand and avoid policies that, in SMMT’s view, risk slowing the transition and chilling investment.
