Motorists are scrambling to buy electric cars amid a rush to beat a “punitive” £2,000 tax raid imposed by Rachel Reeves.
Sales of electric vehicles (EVs) were up 41.7pc in February as buyers sought to avoid the additional levy on ownership that takes effect next month, according to the Society of Motor Manufacturers and Traders (SMMT).
Mike Hawes, the industry lobby group’s chief executive, warned the changes being introduced by the Chancellor would “perversely, dissuade EV purchases”. However, he said in the meantime they were also triggering significant demand from drivers scrambling to avoid them.
It came as the overall car market shrank for the fifth month in a row, in a worrying sign for manufacturers.
The “expensive car supplement” applies to cars with list prices of more than £40,000 and adds £2,125 to an owner’s tax bill over five years. Until now, EVs have been exempt.
However, when the rules change in April, most EV customers will be forced to pay up because the vehicles usually cost much more than their petrol and diesel counterparts. A typical EV is currently priced at £48,600 before discounts, according to Jato Dynamics, an industry data firm.
Against this backdrop, the SMMT has predicted a further surge in EV uptake in the coming weeks “as buyers take their last chance” to beat the tax raid.
It added: “Relative to the rest of the market, EVs are disproportionately affected, as higher production costs mean the average EV retails above the [tax] threshold, which remains unchanged since its introduction in 2017.
“The introduction of this measure also risks disincentivising the used market as well as the new, impeding a faster, fairer transition.”
Electric cars accounted for 25pc of all cars sold in February, the SMMT said. A total of 21,244 EVs were sold overall, up from 14,991 a year earlier.
Sales of hybrids were also strong, with plug-in sales up 19pc and standard hybrids up 8pc. By contrast, petrol sales fell 17pc to 39,865.
The overall number of cars sold fell 1pc to 84,054 – the fifth month of decline in a row.
February is usually a low month for sales, partly because of licence plate changes that come into effect in March, the SMMT said.
However, the lobby group also highlighted an ominous 4pc reduction in purchases by fleet operators, which have “driven previous market growth”.
It comes after separate figures from the group revealed an industry slowdown in production across Britain.
Jamie Hamilton, a car market expert at Deloitte, said: “A slowing in vehicle production and weaker consumer demand in the UK and Europe has led to another dip in vehicle sales in February.
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