It was previously communicated that the year 2030 would mark the end of sales of new internal combustion engine (ICE) cars and small vans, but the UK government has since extended this deadline to 2035. However, despite this delay, there are still important questions to consider regarding the advantages of pushing back this target date.
The majority of EU states, including the UK, were targeting 2035 as the deadline for the transition to electric vehicles (EVs), but the delay has put a strain on manufacturers who were working towards the original 2030 deadline. Ford UK’s CEO openly expressed disappointment about the delay, as the company had been on track to meet the original deadline. On the other hand, Nissan has made the decision to continue targeting 2030 as it is seen as the responsible course of action.
Various factors have played a role in prompting the decision to delay the transition to 2035. One such factor is the insufficient on-street charging facilities and limited range of EVs, both of which have been improving but still present challenges. However, the most significant factor influencing the delay appears to be grid capacity.
Grid capacity poses a substantial problem, with the additional burden of recharging EVs expected to overwhelm the existing grid infrastructure. The construction of the Hinkley Point power station, as well as the nuclear program, have faced delays, contributing to the grid’s inability to cope with the added pressure. The solution to this power problem lies in the development of on-shore and offshore wind farms, but the process has been hindered by community resistance and the need for skill shortages in the construction sector.
Another issue at hand is the price of EVs, especially for the most basic models. While the price is expected to decrease as supply increases and battery technology improves, there are concerns about a potential glut of vehicles waiting to be purchased by 2030, leading to price reductions to move stock. However, manufacturers like Volkswagen are already facing challenges with lower sales and increased material costs, as well as the possibility of storage charges due to the 2035 deadline. On the procurement side, it is important for individuals to discuss the most tax-efficient method for purchasing a new vehicle with their accountant, considering the various options available.
In addition, the government is grappling with the potential reduction in fuel excise duty and contemplating a road charging program to make up for the loss of revenue from fossil fuels. This program is still under discussion, but it is likely to replenish the government’s coffers despite the changes in taxation that will be introduced. As we move towards the electric age, there remain complex considerations and decision-making for both individuals and the government.