Fiat warns government must reinstate electric car grants amid sales slowdown

The government must reinstate its controversially-axed grant for electric cars in order to meet looming sales targets at the end of the decade, Fiat has warned.

The UK is currently eyeing a target of 80 per cent electric vehicle (EV) sales by 2030, while bans on the sale of new petrol and diesel vehicles come into force in 2035.

But high costs, interest rates and issues surrounding insurance have weighed on uptake, with sales figures dipping in recent months.

Sales of new electric cars to private buyers fell sharply in January despite the UK registering its one millionth model, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

In November, the Office for Budget Responsibility (OBR) halved its EV sales target for 2027.

Fiat’s UK Managing Director, Damien Dally, said: “More needs to be done. Consumers need further support to have a reason to make the switch to electric.”

“The good news is the UK has now passed the one million electric vehicles landmark. However, the electric car market in this country is in real jeopardy. Private sales, as opposed to business and fleets, are softening and that’s a trend that needs a collective effort to reverse,” Dally added.

The warnings from the Italian maker of the Fiat 500e come after peers earlier this month called on ministers to introduce “targeted grants” to bring the price of electric models in line with petrol cars.

The government controversially pulled the plug on its last remaining electric car subsidy in June 2022, leaving the UK as the only major European country without any incentives for the vehicles.

Thom Groot, co-founder and chief executive of The Electric Car Scheme, told City A.M. “The government’s flip-flopping and inconsistent policies over the last few years have led to confusion for the UK public, and dramatically slowed the uptake of electric cars.

“They are utterly failing to meet the targets they have set for themselves. The OBR has already significantly revised down its prediction from March 2023 in November, but we’re now behind even that.

“In 2024 to date, electric car uptake is 22 percentage points behind the March 2023 forecast, at less than 15 per cent of total new car sales – woefully short of what is needed to reach 100 per cent by 2035.”

The Department for Transport (DfT) did not respond in time to a request for comment.