The Green Insurer has welcomed government plans to subsidise loans for drivers purchasing electric vehicles but has called for further measures to support their uptake.
The company, which focuses on reducing carbon emissions and promoting environmentally friendly driving, has suggested additional incentives to encourage motorists to make the switch.
Discussions are reportedly underway between the government and car finance firms to expand access to low-interest or interest-free loans. One proposal under consideration is for the government to underwrite private sector loans, reducing monthly repayments to bring the cost of electric vehicles closer to that of petrol or diesel models.
Research from The Green Insurer suggests removing Insurance Premium Tax (IPT) on electric vehicles could also encourage uptake. The study found that 36% of motorists would consider replacing their petrol or diesel vehicle with an electric model if the 12% IPT were removed from electric vehicle insurance.
The research also found that 64% of motorists believe the government should provide incentives for purchasing electric vehicles. Among petrol and diesel vehicle owners, 31% intend to buy an electric or hybrid car as their next vehicle, while 34% are indifferent to the type of fuel their next car will use.
“Subsidising loans for electric vehicles is a welcome move but it is needed given that sales of electric vehicles are below Government targets and shows more is needed to shift the dial,” said Paul Baxter, chief executive officer of The Green Insurer.
He added that removing or reducing insurance premium tax on electric vehicles would be a “straightforward way” to encourage drivers to switch to electric from petrol or diesel cars, saying that the removal of the tax would be a good short-term way to boost sales of electric vehicles.
“By getting more new electric cars on the road we are building a stock of greener used vehicles for the future. Scrimping on the environment is just something that we cannot afford,” Baxter said.
The Green Insurer’s research identified cost as a key barrier to adoption, with 60% of motorists citing the higher price of electric vehicles compared to petrol or diesel models. Other concerns included the future cost of battery replacement (52%), servicing expenses (34%), and the perception that electric car insurance premiums could be higher (23%).