So the UK Government is to give
up to £5000 to each buyer of an electric car or plug-in hybrid. How kind of them. Or rather how kind of us, who pay the taxes that are being given away like this. It’s great for getting news headlines, but will it have much real effect?
At the moment there are hardy any cars that would qualify. The
g-Wiz and
Mega eCity aren’t real cars. The
Mitsubishi i-MiEV,
Smart ED and
Mini E aren’t on sale yet. Nor are the plug-in hybrids: the
Vauxhall Ampera, a version of the Prius, a Focus, a Golf, and the
Fisker.
But the measure doesn’t take effect until 2011, when all those cars should have hit the market. Around that time there will also be other plug-in hybrids. Renault-Nissan pledges to have pure-electric cars on the road by then, and so does Tesla with its
Model S saloon.
A subsidy will help, but it certainly won’t cover the cost of upgrading from diesel or petrol to e-power. The Ampera will cost twice the price of the similarly-sized Astra. The Mitsubishi i-MiEV is twice a petrol i. You get the picture. But a five grand bung is better than nothing, and will encourage early-adopters to take the plunge.
At the moment, there’s nowhere much to charge these things. It’s chicken-and-egg: no charge points makes ownership impractical, while no cars makes it uneconomic to build charge points. The subsidy should encourage councils to install more charge points, because they will expect there to be users.
I like the new generation of electric cars. They accelerate fast, and they’re smooth and quiet. For a two-car household, the car that does the short trips could probably be replaced by a pure-electric. And the plug-in hybrids solve the problem of range: if you need to go on a long trip, you don’t have to stop and recharge for hours, because after the batteries run down the petrol engine kicks in.
But I’m always suspicious of a subsidy for a particular type of technology. The idea of this one is to reduce CO2, but why not just give a subsidy to all ultra-low-carbon vehicles? Then if someone invents something better - an ultra-efficient conventional car, or a fuel-cell machine - it would also qualify. Because after all, plug-in hybrids aren’t low carbon when the engine is running. And if the power comes from fossil-fuel electricity they aren’t even zero-carbon when running in electric mode (though they’re lower than a normal car).
And there’s another reason to be suspicious of the subsidy. At the moment in Britain, a litre of petrol costs about 33p - to which you must add 54p duty and 13p VAT, to make £1 a litre that you pay. In other words, the fuel is effectively taxed at 200 percent. Domestic electricity is taxed at 5 percent. So if many of us switched to electric cars, the Treasury would have a colossal hole in its finances. So doubtless a future Chancellor would have to find a way of taxing our electric motoring back to roughly the level it costs in a normal car now.
There’s no free lunch.
Taken from Topgear website
__________________