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The Spring Budget, unveiled by Chancellor Jeremy Hunt MP today, extended the fuel duty freeze. The continued 5p per litre cut is now expected to end on 22 March 2025.
Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said: “With the ongoing shift in sales models and the landmark ZEV mandate coming into force, dealers will be under substantial pressure to adapt to the transformative trading landscape.
“As such, the Budget provided a significant opportunity for the Government to provide a strategic and clear vision to support the automotive retail sector but has been an opportunity which has largely been missed.”
EVs were omitted from the Chancellor’s statement, raising concerns due to slow consumer demand for EVs.
Lisa Watson, director of sales at Close Brothers Motor Finance, said: “Drivers would’ve been hoping for changes such as a cut to VAT on EV charging in order to improve affordability, as the upfront cost of purchasing an EV remains high.
“The absence of any impactful changes will also make the Government’s own zero emission vehicle (ZEV) mandate harder to achieve – and will cause headaches for car manufacturers in the process.
“Consumer demand for electric vehicles is already slowing, and our research showed that just 12% of motorists looking to purchase a car this year will go for an electric vehicle, down from 14% last year.”
The Government previously announced these measures in the spring of 2022 as a temporary extension to the cut in fuel duty rates. The assumed inflation increase in fuel duty in 2023-24 has not taken place.