Use car industry fines to boost EV sales, says Polestar boss

Polestar’s Matt Galvin says ZEV Mandate fines should be used to boost take up of electric cars

Polestar MD Matt Galvin says government isn't listening on EVs (Polestar)

Polestar UK MD Galvin has been outspoken in his views on government support for electric vehicles, telling us last year that the UK is the “worst in Europe” for electric car incentives.

Now his frustrations are boiling over on additional EV taxes and a lack of incentives for people to drive cleaner electric cars.

“I find it immensely frustrating that the government is slowly nibbling away at the few benefits that are left for retail buyers or any driver actually to consider an electric car,” Galvin told The Independent.

Galvin also takes issue with the government’s expensive car supplement, a levy on “luxury” EVs costing more than £40,000. “The supplement was [extended to EVs] in April with a value that was created back in 2017 and not adjusted for inflation. It’s completely ridiculous. Even a Vauxhall Astra Electric is considered a luxury car with that price cap.”

Also hindering the transition to EVs is a recent proposal by TfL to extend London’s congestion charge to include electric vehicles, says Galvin. “There wasn't going to be any preferential rate for EVs. Now there is a small discount, but the fact is as retail demand for electric cars is still sluggish, we need more carrot and less stick to attract as many people as possible to make that transition.”

The Vauxhall Astra Electric is considered a luxury EV, according to the government’s expensive car supplement levied on cars costing more than £40,000 (Vauxhall)

“They should leave the congestion charge alone. The air quality in our towns and cities is widely reported as not being particularly good. And one of the ways to make that better is, of course, to encourage more people to drive an EV.”

Galvin suggests a congestion charge exemption for EV drivers and preferable parking rates. “We also need a fiscal incentive for retail customers to consider an EV. We keep talking about it, the government keep not listening.”

Galvin also has a plan for how EV incentives could be introduced at no cost to taxpayers. “I don't think the taxpayer should fund that incentive, but what we could do is use the fines that are going to be paid by [car makers] for not meeting the ZEV mandate to fund it. Then it becomes a self-fulfilling prophecy with no taxpayer liability. It means those [car makers] that aren't compliant end up funding the incentive to attract more customers to electric cars.”

The ZEV mandate was introduced to push car makers to increase the number of EVs they sell, with the 2025 target set at 28 per cent. Recent changes to the mandate allowed car makers greater flexibility in meeting those targets through the use of a credit system that includes relying on future sales of EVs. Galvin thinks it was the wrong move.

“What that has done is allow manufacturers to kick the can down the road in terms of accelerating the change to zero emission vehicles by mortgaging future underperformance further and further and further into the future.

“When we all get to 2029 and that can has been kicked down the road for the past four years, are we suddenly going to meet the target overnight? No, we're not. There needs to be a roadmap which gets people to that compliance level and that roadmap has been altered significantly.”

However, industry mouthpiece SMMT (Society of Motor Manufacturers and Traders) has been more positive, saying “recent adjustments to the ZEV mandate were welcome”.

Galvin is aware of the impression he gives as the boss of an electric car company criticising the government for not trying to boost electric car sales. However, he’s confident that his proposals wouldn’t be criticised by tax payers.

“The irony of me saying this as a boss of an electric car company isn't lost on me. But if you follow the method that I just described, which is to use the fine revenue from OEMs that miss the ZEV mandate to fund incentives, the revenues are coming from a fine mechanism that was never budgeted for in the first place.”