The Society of Motor Manufacturers and Traders (SMMT) warn that electric vehicle incentives are “unsustainable”, a claim that risks confusing short-term commercial pressure with long-term market reality, writes Fraser Brown of automotive consultancy, MotorVise.
If EV grants are withdrawn too soon, it could undermine the progress the industry has already made. That’s not to say the SMMT is wrong to highlight the pressures facing manufacturers and retailers as the UK accelerates towards electrification. Margins are under strain; costs remain high and meeting regulatory targets is increasingly challenging. But the conclusion that incentives themselves are the problem does not stand up to scrutiny.
In 2025, the UK registered just over 2m new cars, around 473,000 of which were battery electric vehicles. That places EVs at just under a quarter of the total market, a level few could have predicted just a few years ago. From a dealer’s perspective, EVs are no longer a fringe technology being forced on motorists by regulation but a core part of the forecourt mix.
So, when we talk about incentives being unsustainable, we must be clear about what they are actually doing. Anyone working in a dealership knows customers buy according to affordability, specifically the monthly payments and incentives help bridge that remaining gap between EVs and internal combustion engine (ICE) vehicles, particularly in those volume segments where price sensitivity is highest.
Until EVs achieve consistent price parity with ICE vehicles, removing incentives will only make EVs harder to sell, increase stock risk and slow throughput at precisely the point where scale matters most. Nearly half a million EV registrations in a single year proves that demand responds when the offer stacks up. The challenge for the trade isn’t persuading customers that EVs work, it’s making them work financially at the point of sale.
There’s also strong evidence that once customers have made the switch, they don’t look back. Research consistently shows that around nine in ten EV drivers say they would not return to petrol or diesel. Dealers see this reflected in customer feedback and repeat behaviour. EV buyers are typically highly satisfied and far more confident in their purchase decision after ownership. This tells me that incentives are not propping up an unwanted product, rather accelerating adoption of a technology that largely sells itself once experienced.
Grants in the UK and EU largely benefit domestic legacy manufacturers, helping them scale production, protect jobs and close the technology gap during an intensely competitive global transition. At the same time, Chinese manufacturers, already on track to account for around one in ten EV sales in the UK, sit outside this support framework. Rather than being a weakness, this dynamic may encourage overseas brands to establish manufacturing bases in the UK or Europe to qualify for incentives, bringing investment, competition and greater choice to consumers. For dealers, that means broader ranges and sharper pricing.
There is room for sensible, evidence-based adjustment to policy. I’m comfortable with minor tweaks to the ZEV Mandate as the market evolves but calls to scrap it altogether would inject exactly the kind of uncertainty the trade can least afford.
Manufacturers, retailers and consumers are already working towards the 2030 end of new ICE car sales. Investment decisions have been made, training delivered and stock strategies adjusted. What the trade requires is policy consistency, not sudden shifts that make forecasting and planning harder.
Charging infrastructure is also improving, and for drivers with off-street parking the EV ownership proposition is financially compelling. However, there remains a glaring gap for those motorists without access to home charging, who are unable to benefit from cheap overnight electricity.
Until this particular imbalance is addressed, incentives remain an important tool in keeping EVs commercially viable for a wider customer base, particularly in urban and mixed-use markets.
EVs now represent a substantial share of registrations, customer satisfaction is high and the direction of travel towards 2030 is clear. The risk to the motor trade is not that incentives exist, it is sudden shifts in policy which creates instability. Remove such incentives too soon and dealers will be left to absorb the consequences through slower demand, higher stock risk and nervous consumers.
If the industry wants a stable, profitable transition, the answer isn’t to pull away support, it’s to manage it intelligently until the market no longer needs it.
Fraser Brown is MD of Motorvise
