Firstly, let’s clarify that no UK scrappage scheme is confirmed yet and we wait in hope for Boris and Rishi to announce their plans for car manufacturers. However, with many industry experts expecting some sort of scheme to be introduced to help the car industry recover, we thought it may be useful to explain how any such scheme would be likely to work.
What would a new EV scrappage scheme really look like?
The most likely outcome is that the government will offer to contribute up to £6,000 to a new ‘green motor’. If the most recent scrappage scheme after the 2009 banking crash is anything to go by, then the scheme will likely last for around 12 months. During this time, individuals would be able to trade in a car which is at least 10 years old in order to receive money off their new purchase.
Will the scheme only cover purchases of electric vehicles?
‘Green motor’ is a rather broad term and is likely to include fully electric cars as well as self-charging and plug-in hybrids. However, the recent French and German stimulus packages made allowances for domestic petrol and diesel cars or partial grants if you could prove the new vehicle was more efficient than the old. That said, there is increasing pressure from the UK motor industry for the scheme to be available for traditionally fuelled vehicles as well. With the reliance of many regional economies on large car manufacturers like Nissan, BMW and Jaguar Land Rover, the government may be forced into a more widespread offering.
What impact could this have if it is introduced?
The carbon footprint impact of the scrappage scheme would be hard to quantify given the lack of precedent. Cars currently account for around 20% of UK emissions. As such, one cannot argue that swapping a percentage of older vehicles for newer, more-efficient vehicles (electric or not) would have a major impact on our carbon emissions. Economically, the 2009 scrappage scheme led to around 50,000 new vehicles being purchased, around 0.1% of GDP. If a similar level of success is achieved in 2020 then this would represent a boost of around £3 billion to the UK economy.
How likely is this scheme?
Sadly, this potential scheme may be no more than a rumour or fledgling plan. The Financial Times has reported that four senior officials consider it now ‘very unlikely’ that such a scheme will be launched. It is understood that, while the Treasury are looking for ways to stimulate the UK economy, any scrappage scheme may benefit overseas manufacturers more than British firms. That said, clearly some measures will be taken to boost the domestic market.
If you are intending on switching to electric but are holding off to see what the future holds, remember that charge point grants can be secured up to four months before your new electric vehicle arrives. You can start the ball rolling on charging installation now and have everything in place ready to take advantage of whatever incentives are offered in the near future.
A member of our team would be happy to discuss this in more detail and answer any questions that you have. Call us on 0141 280 8890 or drop us an email at email@example.com.