PwC comments on the government’s initiatives to support the transition to electric vehicles

Dom Tribe, automotive sector leader at PwC UK, comments on the impact of the Government’s package of measures for electric vehicles on the UK’s automotive industry: 

“The Budget’s EV package arrives at a pivotal moment for the UK automotive industry. Manufacturers are navigating simultaneous pressures: tightening zero-emission vehicles (ZEV) mandate trajectories, rules-of-origin complexity and the capital intensity of retooling for electrified production. Today’s measures provide welcome demand-side support, but the ability to create stable, medium-term market conditions will be scrutinised.  

“The introduction of a pay-per-mile regime adds another variable to an already complex policy environment. While the principle of long-term revenue sustainability is understood, its design and timing will be critical. If perceived as unpredictable or onerous, it could affect fleet renewal cycles and slow the recovery in EV volumes just as the sector shows signs of stabilisation. 

“For original equipment manufacturers (OEMs) and suppliers, the bigger question is whether the UK can translate incentives into a globally competitive EV ecosystem, covering battery supply chains, charging resilience, and the skills pipeline required for software-defined vehicles (SDV). With investment decisions increasingly challenging, policy consistency is as important as policy generosity. 

 “If implemented coherently, the package could help stabilise volumes, improve planning certainty and keep the UK in the consideration set for future electrification investment. Much still depends on broader demand resilience, and any perceived volatility in the tax and regulatory regime risks slowing the sector’s recovery and will knock consumer confidence for EV adoption at a critical juncture.” 

Panos Stergiopoulos, e-mobility leader at PwC UK, comments on the Government’s package of measures for electric vehicles on the EV sector: 

“Measures announced today to accelerate electric vehicle (EV) adoption are a welcome boost for EV demand and infrastructure. However, the Government’s decision to also introduce a mileage-based charge on EVs from April 2028 – on top of the Vehicle Excise Duty, Expensive Car Supplement and 20% VAT on public charging – risks sending mixed signals at a critical moment for the industry. 

“These measures could blunt the positive impact of incentives and dent consumer confidence just as the market begins to accelerate. International experience shows potential risks: when Germany prematurely withdrew EV grants in late 2023, battery electric vehicle sales declined. Policy consistency is key to sustaining momentum.” 

Amish Patel, transport leader at PwC UK, comments on the Government’s package of measures for electric vehicles on the public transport sector: 

“The proposed electric vehicle (EV) tax relief could be the catalyst for a much bigger shift: the electrification of large public-sector transport fleets. This isn’t marginal - these fleets span organisations from transport authorities and infrastructure operators to regional combined authorities. The technology is ready, but adoption has been held back by practical realities: reliable charging, driver confidence and basic questions like whether a van can realistically be taken home and charged overnight. If these barriers are addressed, the public sector could lead the UK’s next wave of transport decarbonisation.”

Our full Budget reaction