SMMT Electrified: Charging infrastructure and government support key to UK EV growth

17 March 2025

Despite the UK’s battery-electric vehicle (BEV) sales leading the way in Europe last year, challenges lay ahead for the market. Phil Curry, Autovista24 special content editor, reports on the recent SMMT Electrified conference.

The UK’s electric vehicle (EV) market is facing several challenges that could disrupt the growth seen in recent years. From a lack of charging locations to challenging sales targets, there are many roadblocks to consider.

The SMMT Electrified conference was an opportunity for the UK market to come together and discuss the issues. Speakers and attendees came from across the industry, with carmakers, suppliers and EV specialists present.

Key points raised at the conference this year included:

• A need for the industry and government to work together.
• More investment in UK charging infrastructure.
• Flexibility on the zero-emission vehicle (ZEV) mandate targets.
• Changes to the Expensive Car Supplement (ECS).
• Quicker decision making for government regulations.

A lot has changed since the last conference in 2023. Two years ago, there were calls for clarity around the 2030 petrol and diesel new-car ban. This year highlighted the need for more clarification. Between the two conferences, the ban changed to 2035, then back to 2030. The ZEV mandate was enacted with its first full year in 2024 proving a new obstacle.

So, the industry needs more support to reach its targets and incentivise buyers to consider an EV. The SMMT is calling for flexibility in the ZEV mandate, alongside a cut in VAT on public charging costs. The price of new EVs was also highlighted as a concern. This was all documented in a new report launched at SMMT Electrified: In it together, why every sector wins with EV volume.

Enticing buyers

In 2030, a ban on the sale of new petrol and diesel vehicles will come into effect. At that time, the ZEV mandate required 80% of carmaker fleets must be either a BEV or hydrogen fuel-cell vehicle.

Despite the UK emerging as the leading BEV market in Europe at the end of 2024, registrations have slowed. While the ZEV mandate target for fleets last year was set at 22%, the entire market managed just 19.6%. The ZEV target increases to 28% this year, so many brands may struggle.

An SMMT-commissioned survey revealed 23.1% of would-be new-car buyers plan to get an EV between now and 2028. While encouraging, this is below the ZEV target for this year alone. Additionally, of these drivers, just 11.5% would be switching to an EV from another powertrain. Therefore, the market is heavily reliant on those who have already made the switch and may be looking to upgrade.

‘Our modelling shows halving VAT on new EV purchases would encourage sceptics to make the switch, growing demand by a further 15% on top of current outlooks and resulting in two million new EVs on the road by 2028. That would also result in a six megatonne CO₂ saving, equivalent to a sixth of the UK’s annual aviation emissions,’ commented SMMT chief executive Mike Hawes.

Call for support at SMMT Electrified

With the right government support, the SMMT study revealed that two-in-five electric sceptics might change their minds. This includes purchase incentives, a greater charge point rollout, and a reduction in public charging costs through a VAT cut.

‘Everyone wanting to achieve net zero in the UK must stick together,’ Hawes stated at the event. ‘No industry, sector or stakeholder, including government, can deliver this alone. The UK automotive industry has done and is continuing to play its part, collectively committing over £20 billion (€23.8 billion) to develop and bring to the UK world-leading EV technologies.’

Hawes highlighted that the UK needs to pick up the pace of its EV transition. He cited a report by the Committee on Climate Change, which stated that such a move is fundamental to the prosperity of the country. Hawes suggested that some critical assumptions were made to realise this vision.

‘First of all, it is expected in the report that electricity will become cheaper and that EVs will reach price parity with internal-combustion engine (ICE) cars in the next couple of years. I hope that is true, but frankly, I think we remain a very long way from both. So, we do need to pick up the pace, despite how strong it has been over the past couple of years,’ he commented.

The impact of charging

One big issue impacting purchase decisions is charging infrastructure. ‘Charging, and the perception of charging, remains one of the biggest barriers to purchasing an EV. Consumers will simply not buy EVs if they cannot conveniently charge them,’ commented Hawes.

‘Now, we are seeing infrastructure expand, up by more than a third last year. This is good news. But the increase is just about keeping pace with the EV rollout,’ he added.

According to Hawes, there is still only one public charge point for every 28 plug-in cars on the road in the UK. This ratio has not changed in the last 12 months. Even worse is the regional variation. There is one charger for every 10 EVs in London. Meanwhile, there is one point for every 57 plug-in models in the northeast of England.

However, changes are coming. The UK government is investing more in charging locations. ‘At the last budget, we announced a £200 million investment to continue powering the charge point rollout, unlocking £6 billion of private investment in the process,’ stated Lillian Greenwood, future of roads minister.

‘Currently, there are around 75,000 charging points across the UK, a 32% increase since this time last year. That is in addition to the 680,000 households in England that have access to a domestic charger.

‘But we need to go further. In December, we confirmed that over 100,000 charge points will be installed across local authorities in England, and we have delivered 1,400 new charge sockets outside schools and colleges over the past 12 months,’ she added.

Charging costs

For drivers without a domestic charger, such as those without off-street parking, the charging costs can be higher. These drivers rely on the public charging network and often rapid charging locations.

According to the minister, drivers with access to domestic charging can save up to £790 a year if they mostly charge at home. When questioned about the higher price for drivers who are without access, and the potential of reducing VAT on public charging to help them, the remark was not answered.

Instead, the minister highlighted the ways the government is making it easier for drivers who can park outside their homes, to access domestic charging. ‘One of the things we are doing is making it easier for people who do not have a driveway to be able to charge outside their home. We announced new guidance in December about cross-pavement charging and we are rolling out thousands of new charging points,’ she responded.

The cost situation was highlighted later by Ryan Fisher, head of EV charging infrastructure at BloombergNEF. He stated that UK drivers could save around $1,200 (€1,099) a year in fuel costs for 14,000km (8,700 miles) of driving with a domestic charger and dedicated EV energy tariff. However, if relying on fast charging at an average of $0.97 per kWh, drivers would spend $1,000 more annually.

‘When we think about pricing, what we have seen is that prices have risen for fast charging in many markets. This is more expensive than petrol. In the UK, it is probably about 1.5 times more expensive [per mile],’ he stated.

Expensive cars

Another issue that could impact the UK’s BEV market is the addition of vehicle excise duty (VED) to models from April 2025.

Currently, all-electric vehicles are exempt from this tax. However, from 1 April, vehicles registered after 31 March 2017 will have to pay an annual fee of £195. For brand new cars, the first-year fee will be £10, increasing in the second year. Models purchased before this date will have a VED fee of £20 per annum.

However, the biggest problem facing the market is the Expensive Car Supplement. This is an additional tax added to a vehicle between its second and sixth year of registration. Currently, the tax is levied on models that cost £40,000 or more.

Many BEVs would be eligible for ECS. The technology is still expensive compared to ICE models. This leaves consumers looking for a larger family vehicle with few options. They could pay thousands more in tax, consider the limited range of cheaper models or enter the used-car market.

The ECS was established in 2017, and despite changes in the economic markets, has never been revised. Hawes suggested at the SMMT Electrified Conference that this threshold should be increased to £60,000.

Speaking in one of the panel sessions, Paul Philpott, president and CEO of Kia UK, commented on the situation. ‘We did some calculations, and last year, around 25% of non-electric vehicles were above the £40,000 threshold and attracted the £2,500 additional taxation over the ECS period. However, 70% of BEVs last year were priced above £40,000.

‘So, we are about to tax most of the EV market more VED for buyers than they would pay on an ICE car. How that supports our road to zero I am not sure,’ he added.

Incentivising the market

A point hammered home at the event was that the UK EV market needs incentives to continue to grow. These are not just monetary, but regulatory as well.

‘There are two issues, incentives and disincentives. The fact remains that consumers, especially private consumers, are not buying EVs in sufficient numbers to meet our ambitious and collective targets. Our industry has had to discount heavily to encourage demand,’ commented Hawes.

One issue is the ZEV mandate, which the SMMT and automotive industry wants to be more flexible. ‘We have to accept that the ZEV mandate has turned out to be a road paved with good intentions but has not yet taken us to where we need to be.

‘Back when it was drawn up, the roadmap was perhaps clearer. Energy prices were lower. Raw material production costs were improving. Money was cheaper. There was higher organic demand for these types of vehicles,’ Hawes added.

Yet with higher energy costs and geopolitical uncertainties, the pathway has changed. While the EU has recently announced plans to amend CO₂ regulations to cover five years, the UK government’s trajectory to ZEVs is more rigid.

‘Getting to the 28% threshold is a challenge right now. It increases to 33% next year, and then the big challenge comes. If we have not got momentum going into 2027, how do we get from 33% to 80% in four years? Momentum must come from government incentivisation for retail customers to make the switch now,’ added Philpott.

Speed of decisions

Even if there was a change to a more flexible system, this would need to be communicated and enacted quickly. Without this, carmakers could still struggle.

‘I think the thing that is surprising was in the EU they started a review at the beginning of January, and they published the output of that a couple of weeks ago. So, they have turned something around, quickly, and I think we need to ask the UK government to do the same,’ commented Lisa Brankin, managing director at Ford of Britain.

The SMMT’s report calls for an extension and expansion of regulatory flexibilities that support continued investment in the ZEV rollout. This also supports compliance with rising mandate targets.

Acknowledgement of various technologies, including hybrids and plug-in hybrids, have to play in decarbonising road transport was also called for. This is either as a stepping stone or toward the full delivery of zero-tailpipe emissions by 2035.

Overall, the UK’s EV market could continue to lead Europe. But with challenges ahead, the message is clear. The industry needs support and must work together with the government and the private sector. Revisions to costs, the charging network, taxation and more will help the EV market to thrive. But these changes are needed sooner rather than later.