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EV subsidy vital for fleet uptake

Date: 22 February 2011

The government's £5000 electric vehicle subsidy must continue if EVs are to be cost-competitive for fleets, according to Lex Autolease.

A poll by the top leasing firm showed that almost half of financial directors (47%) would not pursue their company's interest in electric vehicles, or plug-in hybrids, if the subsidy was removed.

Chris Chandler, principle consultant at Lex Autolease, said: "We've published the actual cost of ownership figure, which clearly shows that the subsidy is vital to ensuring these vehicles are cost competitive. Without it, new EVs such as the Nissan Leaf can't compete with the likes of a diesel Golf or even the Toyota Prius on cost."

He continued: "Businesses are sending out a clear signal that their interest in electric vehicles could be seriously diminished without the subsidy. Particularly if future changes mean the numbers no longer stack up."

In contrast, business drivers said that one-off, up-front incentives are not a major turn on. Only 2% would be enticed by a discount or subsidy, whereas almost half (43%) said that low or zero company car tax would make them want to choose a plug-in hybrid or fully electric vehicle.

Chandler added: "This spells the way forward for the future of business car taxation, which is essentially more of the same. The current system rewards those who choose clean and frugal vehicles and it has been working well since 2002.

"However with long vehicle replacement cycles the industry needs plenty of advanced notice and a longer term commitment from Government to allow them to adopt these new technologies. Given the scale of the investment by manufacturers, the industry can't afford for this to be a flash in the pan like scrappage."

Since January, EV buyers have been eligible for up to 25% off the cost of a plug-in car, limited to £5000 but will be reviewed in 12 months time.

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