Focus on Transport: Electric Cars – Does the government really want to go green?

/ Tax

Author: Henry Ejdelbaum

Tags: car, electric, energy, fuel, green, Industry, motor, Tax, Transport

AIMS Accountants for Business - Green Energy

If you’ve come across a car magazine or a motor show recently you’ll have noticed a high percentage of hybrid cars or exclusively electric cars and you would be fooled to thinking that the there is a growing demand, especially when the figures show that less electric cars were purchased in 2012 than the previous year.

My question is, considering the government makes an estimated £25bn from fuel duty each year, is there really a desire to ‘go green’?

The reason we haven’t seen more electric cars is because of their steep price tag. Although the expenditure from the initial outlay can be clawed back over the lifetime of the car, bearing in mind the average household spends around £1,900 per year on fuel and you can do 100miles in an electric car for only a few pounds.

Critics also suggest that consumers get “range anxiety” because the electric cars can’t go very far without needing to be recharged. Suggested ways around the problem are to either have batteries that you can swap in and out for long distances or to have self-charge electromagnetic pads fitted on the underside of cars and imbedded in roads like a Scaletrix car; but the cost doesn’t bear thinking about.

From the very brief research I have done into electric transport it appears that we need a better ‘product’ to encourage demand. If manufacturers can iron out the logistical problems and produce a relatively low cost electric car I think the uptake would be vastly improved.

Maybe this is a more worthy cause than the HS2, and probably half the price. One suggestion is to levy the tax on electric cars and give tax breaks for manufacturers to encourage production?

Let us know how you feel about electric transport and if you think we’ll see more electric cars in the future. We are accountants, so we will always lean towards a financial analysis – it is as simple as that.

P.S To put it in perspective there were 950 electric cars sold in the UK in 2012, 981,594 diesel cars and 934,203 petrol cars. There is clearly a lot of work to do!

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