Labour has revealed a plan that it says will lead to an electric vehicle revolution for the whole of the UK.
With new petrol and diesel vehicles set to be banned from 2030, UK consumers wanting to buy a brand-new car will have to opt for a vehicle powered by electricity. Unfortunately, electric vehicles continue to be more expensive, which is why Labour wants the Government to do more to spark an electric vehicle revolution.
Ed Miliband, who is Labour’s Shadow Business Secretary, has set out Labour’s plan for this revolution, with the party noting that it would do three key things to stimulate the transition.
The first idea from Labour is for the Government to part-finance three more gigafactories by 2025 to build the batteries for future electric vehicles. There is already one gigafactory under construction in Northumberland, with manufacturing set to begin in 2023. That means the part financing of three more gigafactories would bring the UK’s capacity for producing electric vehicle batteries to four facilities.
The UK Government has already made cash available towards upscaling a battery cell production facility in Scotland, which could help pave the way towards a future gigafactory, but Labour wants it to go further.
Interest-free loans for EV purchases
The UK Government has recently scaled back the grants it offers towards electric vehicles, but Labour believes that there needs to be more support for low- and middle-income households wanting to make the switch. It noted that if Labour were to be in Government, it would fund interest-free loans for those households.
Interest-free loans could represent a significant saving for households, as financing an electric vehicle currently comes with reasonably high interest rates. Take the Volkswagen ID.3 for example, which is offered at 4.9% APR. That means those borrowing £24,502.99 to pay for the car on PCP will find themselves paying £2,472.77 in interest, and that’s not including the deposit required, as well as the final payment on top of that.
Offering interest-free loans on electric vehicles isn’t exactly new, especially for those in Scotland. The Scottish Government already offers interest-free loans, which can be used in conjunction with the UK Government’s plug-in car grant. That means drivers in Scotland can already nab an EV for less than those in England, Wales or Northern Ireland.
Rolling out more EV chargers
The final key part of Labour’s plan for electric vehicles comes in the form of rolling out more electric vehicle charging points across the UK. In fact, Miliband noted that the party would support accelerating the charging point roll-out in areas less well-served by existing infrastructure, such as Yorkshire, the North West of England and the West Midlands.
Local councils have already been offered cash for supporting the roll-out of new EV chargers, but many seem to have less ambition than others. Labour didn’t detail how it plans to increase the rate of installations, despite it criticising the current Government for not going fast enough.
Labour’s plan for a green revolution
Ed Miliband is confident that a Labour Government could spark an electric vehicle revolution. In a statement, he noted, “To back the car industry and create jobs, Labour would bring forward ambitious proposals to spark an electric vehicle revolution in every part of the country.
“By extending the option to buy an electric car to those on lower incomes and accelerating the rollout of charging points in regions that have been left out, we would ensure that everyone could benefit.”
Despite touting the same green revolution as the current Conservative Government, Labour said that it would actually spark a revolution, rather than a small uprising.
Miliband commented, “What we cannot do is put a green coat of paint on our unequal, insecure economy. Every worker whose job might change, every consumer who may face a change in what they pay, every single person in this country has got to be at the centre of our concerns. This is the DNA of Labour: green and fair. Green and red together.”
The cost of these plans won’t be cheap, however. Labour estimates that the cost to the UK Government for 100,000 vehicles paid for via interest-free loans would cost £156 million. With Labour arguing that the Government should be willing to fund up to a million purchases over the next two years, that would represent £1.56 billion worth of taxpayer’s cash, a sum Labour thinks is worth paying for an accelerated net zero future.