[Read: Germany to give citizens up to $10K towards a new electric car — doubling its subsidy]
The report says the news will come as part of a speech Johnson is expected to give on July 6. The speech would detail a number of initiatives to revive the UK economy as more coronavirus lockdown measures rise.
Automotive manufacturing is a large company in the UK, with one of the country’s most popular electric vehicles, the Nissan Leaf, being manufactured in the Japanese company’s Sunderland factory. It is also interesting to note that new car sales are down nearly 90% as a result of the coronavirus lockdowns that shut down car dealerships across the country.
While the scrappage system is designed to help increase demand for the automotive industry, it is also favorable to new car buyers. Financial incentives and scrappage programs are the main reason why people avoid making the change, the cost. In general, electric vehicles are more expensive to buy than their combustion counterparts.
The report does not mention any more specific details, however, since it is a scrappage system, we can be sure that it will be a little more nuanced than the subsidy for plug-in vehicles that the UK government currently distributes.
In general, scrapping systems are weighted to provide higher incentives to those who are the drivers of older, more polluting vehicles. We can expect that those in large old diesel cars will be eligible for the maximum scrappage payment. Those who are in smaller, more modern gasoline vehicles, will probably get less.
Nor is there any mention of how the new regime would affect the current government subsidy for plug-in vehicles.
Anyway, it seems very good news for the UK car market and its consumers. Earlier this year, the country’s government announced that it was cutting its subsidy for electric vehicles by 500 euros, bringing it down to 3,000 euros.
Considering that the UK government also aspires to ban the sale of all new petrol and diesel vehicles by 2035, it is good to see him think about doing something a little more proactive to support buyers rather than forcing them with legislation.
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