The Autumn Budget must offer a shot in the arm for the UK’s flagging retail electric car market to shore up continued demand from fleets, experts have warned.
Scheduled for 26 November, the next Budget is unlikely to contain near-future policy changes directly targeting fleets, because low company car tax rates for electric cars and plug-in hybrid models are in place until 2030.
However, the plug-in car market relies on businesses – which accounted for 66% of new cars but 81% of EVs and 85% of plug-in hybrids in the first quarter of 2025, according to the Department for Transport (DfT). That’s largely sales to leasing companies, which then rent those vehicles to fleets.
Toby Poston, chief executive of industry body the British Vehicle Rental and Leasing Association (BVRLA) welcomed the new Electric Car Grant and ZEV mandate as measures to boost flagging retail demand but stressed that wider support is needed.
“The job is far from finished. Attention has been on supporting OEMs in pushing the supply of new electric cars. It must now turn to demand-side measures,” he told Autocar. “Such measures should span the new and used markets [as] both need to be in good health for the transition to succeed. The second-hand EV market needs support as supply is only going to accelerate.”
Poston believes broadening the Electric Car Grant, introducing standardised battery health checks and enabling benefit in kind (BIK) to reflect used values (instead of being tied to the list price when new) would all boost demand, with indirect benefits for fleets. Used EVs cost the same as their combustion counterparts, despite being 20% pricier when new, and the cost of that depreciation is reflected in higher monthly rentals.
Leasing companies want to see change too. Caroline Sandall-Mansergh, consultancy and channel development manager at Alphabet (GB), repeated the company’s calls for the Expensive Car Supplement – an additional £425 on top of the first five annual tax renewals, applied to EVs registered on or after 1 April 2025 – to accommodate EVs’ higher list prices.
Alphabet believes the price threshold should be raised from £40,000 to £60,000 and renewed annually as list prices fall. The average list price of the company’s EV order bank was £57,500 during 2024, while almost 80% were over £40,000. An adjustment was promised during last year’s Autumn Budget but it hasn’t been announced yet.
Sandall-Mansergh said: “The Budget would be a great time for the government to announce some form of industry-wide consultation on what the future of BIK might look like.
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Having owned a privately bought nearly new Megane (500 miles £22k and 2p/ mile on overnight tariff) I can honestly say I won't be swapping back anytime soon. The super smooth and silent driving experience is the icing on the cake. But the views I encounter are mostly died in the wool I'll never swap kind, that makes me think that you could give EVs away free and plenty would still opt for £80 fill ups at the petrol station queue every week. I've covered 3000 miles in 3 months, and that's included several 150+ mile journeys and public charging, so far without any issues. I've only used fast DC charging once though, prefering to charge at my destination. For this the 22kw on board Renault charger has been superb allowing me to fill the car in under 3 hours, often at about 50p a unit (I'm getting about 4.2 miles/kw so that's the same as about 50mpg). This makes me think that mandating 22kw AC chargers into new cars (not very common) and providing lots more of the cheaper 22kw AC chargers in as many places as possible, instead of the focus on ultra rapid DC rows of unused points, are maybe what's needed.
If they raise the expensive car supplement threshold, I hope it doesn't just end up being a handout for luxury EVs. The average person isn't buying a £60k car anyway. I'd love to see battery health checks for used EVs by the way... @super mario 64
Using the money set aside for the EV grant to subsidise kerbside charging and/or reduced public charging for those who cannot park off road who buy a new OR USED EV would be a much better approach than the discount on new EVs
100% agree. Put money in to the infrastructure that's an obstacle to people buying an EV, no matter how discounted it is.
This is why 2035 or whenever cannot happen. You can't ban ICE whilst ICE remains the only practical option to many. Well I suppose you can ban it, but you can kiss your ar5e goodbye to new car sales.