The car scrappage scheme may stimulate new car sales, but it's unclear who will benefit

Getting paid £6,000 to change your existing car for a new electric one may help the car industry - but does the proposed scheme make sense?

scrap car placed in a crusher (UK)
Crushing victory: there are no details of any scheme yet but the aim will bring greater parity to prices of electric and conventional cars

Reports indicate that to encourage the uptake of electric cars the Government is proposing a scrappage scheme giving car owners £6,000 to scrap their old cars and switch to electric.

The logic seems to be to overcome the huge price difference that adds around £10,000 to the purchase cost of an electric vehicle (EV) over and above its petrol or diesel equivalent. But how might any new scheme

Current EV grants

The maximum grant to buy a new electric car is currently £3,000 (while the maximum for a new electric van is £8,000, for electric taxis up to £7,500 and for electric motorbike up to £1,500). On top of that, EV switchers can get up to £350 towards a home charging point that typically costs £700.

It's widely accepted that suburbanites with drives and the space for a home charger usually benefit the most from running an electric car

It is likely that these EV grants will be replaced by the £6,000 scrappage payment, so even with the financial inducement electric cars will still work out at around £4,000 more expensive than non-EVs.

Will £6,000 be enough?

We have to wait and see which age of existing cars will qualify for £6,000 payments to be scrapped.

But, assuming the oldest, dirtiest cars qualify for the biggest payments, it will still leave a lot of money for typical lower income owners to find.

Of course, they will be able to mitigate the costs by opting for lease-hire or Personal Contract Purchases, but that means commitment.

Those who tow a caravan or horsebox will find that, as yet, there's no suitable EV replacement for a torquey diesel engine 

And there is no sensibly priced direct electric replacement for  diesel SUVs, particularly those used for towing. The only electric SUV that can pull more than 2,000kg is the Tesla Model X, prices of which start at £87,000.

A £6,000 scrappage payment for a perfectly good Mitsubishi Shogun or Toyota Landcruiser diesel that tugs a two-horse trailer or a family caravan is peanuts in comparison.

What about hybrids?

So far, ‘plug-in’ or ‘self-charging’, hybrids (which have both a conventional internal combustion engine and an electric motor) have been lumped into the new vehicle sales ban for anything not pure-EV from 2035 (or 2032). 

Transport Secretary Grant Shapps and the Government have already brought forward the ban on all new petrol and diesel cars from 2040 to 2035 - and hybrids aren't exempted Credit: Simon Dawson/Reuters

So it seems unlikely that that hybrid sales will benefit from the new scrappage scheme unless there is a change of heart in a Government that seems eager to stress its environmental credentials.

Why not simply scrap VAT on EVs?

In theory at least, getting rid of VAT would knock £3,333 off the price an EV costing £20,000, £5,000 off a £30,000 example and £6,667 off one costing £40,000.

However, the UK's complicated VAT regulations probably preclude this.

Is the recharging structure adequate anyway?

At the moment, outside of home charging points, it barely copes with current demand, so the proposed £1 billion investment in public charging points is desperately needed.

‘Fast charging’ public points can recharge a battery up to 80% of capacity in about half an hour. Impressive, but that’s a long time to wait in a busy business day and if there’s a queue you could be stuck waiting for an hour or more while you work on your laptop in the car. 

Public charging leaves a lot to be desired. The £1 Billion of funding for improved infrastructure can't come soon enough Credit: Simon Dawson/Bloomberg

If you live in a city and cannot fit a home charging point you depend on other EV drivers to move off the street charging points and it gets a bit like musical chairs, especially at night.

‘PodPoint’ gives the average cost of home charging for a 200-mile range as £8.40. For rapid charging at public points, the rate is typically £6.50 for a half-hour charge sufficient for 100 miles. 

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