Electric Vehicle Incentives — Not Going Far or Fast Enough for Commercial Vehicles and Electric Conversions
Cities and businesses around the world are racing to invest in technologies that accelerate the world’s transition to net zero.
Unfortunately, the primary focus for government policy on electric vehicles remains on passenger cars, whilst the higher negative impact to the environment from the increasing number of commercial transport solutions, particularly small and large vans, appears to be a secondary priority at best.
The Need for Far Reaching Incentives and Stronger Regulation for Vans is Clear
Though electric vehicle sales are increasing dramatically, ICE (internal combustion engine) vehicles are forecasted to remain the leading powertrain for the next decade. As highlighted by a Transport & Environment study “European van market unplugged: how weak regulation is failing electrification”:
“Light commercial vehicles, or vans, account for 13% of road transport CO2 emissions and have been the fastest growing road transport sector in the EU, where CO2 emissions have grown 58% since 1990 and sales have risen by 57% between 2012 and 2019. For comparison, CO2 emissions from cars and trucks have both increased by around 20% since 1990. With a surge in e-commerce post-Covid, the van CO2 problem will only get worse.”
Another T&E study states that there are close to 30 million vans on EU roads today, but only 2 million would be electric by 2030 under the existing European Commission’s Fit for 55 proposal, which targets cutting greenhouse gas emissions by at least 55% by 2030.
Government Support is Stopping Short
Established manufacturers are already selling a range of electric vans and several new players are entering the market with dedicated zero-emission commercial vehicle portfolios. Demand for electric vans is exceeding supply. There is an opportunity for governments to lead by example and support manufacturers of vans to accelerate the transition to fossil fuel free commercial vehicles. For example, in the UK, some government initiatives are already underway, but they are not enough:
In March 2022, the UK Government announced that it has committed to a 2-year extension of plug-in van and truck grants. But this is a false dawn, and in real terms actually represents a reduction in grants available — vans up to 4.25 tonnes can now only claim the large van grant up to £5,000 which was previously £16,000.
In addition, Mayor Sadiq Khan recently announced the expansion of London’s Ultra-Low Emission Zone (ULEZ) on motor vehicles. However, a daily clean air charge to apply to all except zero-emission vehicles was ruled out of the announcement and, from December 2025, even drivers of zero-emission cars will be required to pay.
Can these strategies really be effective in supporting a transition to a net zero economy if they include decreasing grants, caps and do not prioritize commercial EVs in the long-term? The answer is no.
Call to Action
The technology is available today at the right cost and quality to enable fast electrification of new vehicles and mass conversions of ICE vehicles to electric solutions. It is therefore essential that in addition to subsidies for new vehicles, governments increase incentives to rapidly convert existing vehicles.
We call on governments to immediately implement irreversible and long-term commitments to make real impact on decarbonising our economies and achieving long-term sustainability:
1. Irreversible and long-term commitment to incentives for commercial vehicles, as well as passenger cars
2. Accelerated workable infrastructure for commercial EV operators
3. No fees for zero-emissions vehicles, ever
4. Incentives for conversion of existing combustion vehicles to EVs with subsidies and tax reductions
Recently announced initiatives overemphasise the rate of adoption of EVs and minimise the large amount of ICE vehicles that will still be on the road in the next decade.
Ultimately, governments must increase and broaden available incentives, not reduce them, if they want to support meaningful and sustained change.