Car industry welcomes new tax breaks on electric vehicles

The UK’s car industry welcomes the government’s new resolution to extend the tax cut from private consumers to any business company buying electric cars.

The British government had earlier announced in 2009 that tariff breaks of up to £5,000 will only be applied for private electric vehicle buyers. Industry analysts and automakers collectively agree with the new initiative, saying that government subsidies are needed in the first years after the market launch of electric vehicles.

According to Alistair Darling, electric cars are exempted from tax for five years. To further boost the sales of environmentally friendly vehicles, enterprises purchasing electric vans can write off the total cost against their corporate tax in the first year.

The UK government’s move to extend tariff breaks to electric vans and company vehicles has been completely supported by the car industry.

Renault, which plans to introduce two electric city cars and an electric-fuelled model of its Kangoo van in 2011, informed that it was pleased with the government’s recent decision. Jeremy Townsend, a spokesman for the French automaker, stated that the announcement will help assist Renault in the infrastructure needed to make electric vehicles a viable car choice in the UK.

Meanwhile, John Lewis, CEO of the British Vehicle Rental and Leasing Association, is glad that the UK government had given a long term incentive for organizations eager to become early adopters of electric vehicles. Paul Everitt, CEO of the Society of Motor Manufacturers and Traders, believes that the tax cut will make corporate buyers more interested in purchasing electric cars and vans.