Government grants alone will not create the green revolution ministers want to see in the car market, says the RAC Foundation.
The Plug-in Car Grants introduce this month to give electric and plug-in hybrid buyers £5,000 towards their purchases are welcome but need to be followed by more radical incentives the motoring think tank reports.
Incentives such as a so-called feebate system as seen in France, where purchasers of the greenest cars get a significant rebate – potentially several thousand pounds – while buyers of gas-guzzlers pay an extra fee over and above the saleroom price.
The aim is to make the scheme revenue-neutral to the Exchequer and hence the tax-payer. Such a scheme is already in place in some other European countries where rebates of up to €5,000. The French initiative has been so successful that after its introduction in 2008 CO2 emissions from new cars sold fell by 6 per cent, twice the EU average.
Additionally much more needs to be done to allay drivers’ fears over range, reliability, battery life and residual value of electric cars to persuade buyers they are worth the cash according to a new report by academic and consultant Ben Lane, published today by the RAC Foundation.
Alternative fuel vehicles are still too expensive for many car buyers it finds. For example the new Nissan Leaf and Mitsubishi iMiEV will still cost around £24,000 – after taking into account the £5,000 grant – while the greenest Ford Focus ECOnetic diesel car is in the showrooms at about £17,000. According to the report even enthusiastic early adopters of ultra-low carbon vehicles such as plug-in hybrids and pure electric cars are generally only prepared to pay a premium of 15 per cent over conventionally powered cars.
Commenting, Professor Stephen Glaister, director of the RAC Foundation, said:
“We cannot avoid the thorny issue of price. While the current subsidies are welcome they are only a start. The battle to bring down prices could be a long and difficult one, especially if we are to achieve the recommendation from the Committee on Climate Change of getting 1.7 million plug-in electric vehicles on the road by 2020.
“In the meantime consumers need to be reminded that many of the current range of hybrids, petrol and diesel engine come with serious green credentials.”
