VW Group UK boss: EV incentives 'ship has not sailed'

The boss of the best-selling car maker in the UK has called on more incentives to be introduced to support the uptake of electric cars. Volkswagen Group UK managing director Damien O’Sullivan also called on more investment to be made in the public charging network. In a wide-ranging interview, his first since taking over from Alex Smith last December, O’Sullivan also discussed the impact of tariffs on the wider business and how the company had no plans to restrict the sale of ICE cars as a way of becoming compliant with the UK's ZEV mandate. Incentives and support O’Sullivan feels there “could be further stimulus in the market to have people buying electric cars”. “I think there is still space," he said. "I don't think the ship has sailed on it. I think incentive schemes for people to move from combustion to electric cars are always a good way of doing it.” There is evidence to show people are holding onto cars for longer, thus slowing down the CO2 reduction from road cars. O’Sullivan said incentive schemes to support new EV sales would also help create a more buoyant used EV market. He also called for a review on the Expensive Car Supplement for extra VED ('car tax') for cars costing over £40,000 to be reviewed, as “electric cars are more expensive to manufacture”. “When you look at the data and the price point of electric cars that sell now, that can have a further damaging impact on trying to sell more electric cars in the market. So really we would prefer it if it was reviewed,” he said. He supported the calls for VAT on public chargers to be cut from 20% to 5% to match the cost of home charging; and more support for charger network operators to encourage more installations. ZEV mandate consultation Speaking before the government announced its fast-tracked response to the ZEV mandate consultation over the weekend, O’Sullivan said the Volkswagen Group’s UK planning took place on a rolling five-year basis and that the firm had planned its model launches to ensure it would remain compliant with the mandate as it stood. There are no plans for the company to limit the sales of non-electric cars, as some firms – including Ford – have suggested could be an option in order to comply with the ZEV mandate. O’Sullivan said that such moves were “an unfortunate aspect of the ZEV mandate from a consumer perspective”. “That's obviously their prerogative to do that," he continued, "but it does then restrict the options that are available for customers who want to make a decision based on their needs, their lifestyle and what they think of combustion versus battery electric at this time.” Charging network Part of the Volkswagen Group’s submission to the ZEV mandate consultation called for more investment in the UK's charging network. “I do believe that manufacturers, the Volkswagen Group in particular, are making a huge investment, and we're moving towards making sure we can hit targets for battery electric vehicles," said O'Sullivan. “Whether the energy providers and the charging networks are doing it at the same pace and with the same investment is questionable, and I think there should be binding targets for them to have certain amount of charging installations in place as we move through the years of the ZEV mandate.” O’Sullivan said he was encouraged by recent discussion with the Department for Transport, which felt “there should be an over-investment in charging infrastructure” to ensure there are enough chargers at peak times of use. “Now, there’s a kind of chicken-and-egg thing: they [charging providers] say that they won't invest until there are more cars. People won't buy more cars until there is more charging. So something's got to give. And I think if the charging network industry is supported to over-invest in the short term, to allow the cars to catch up, that would be a good position.” Impact of tariffs O’Sullivan said the new round of US import tariffs were the latest “shock” to hit the car industry, after Brexit, Covid and the chip shortage, but while there would be an impact on the Volkswagen Group globally, “we’re not greatly affected by those tariffs here in the UK”. “There are factors here in the UK we need to navigate around, but strictly speaking those tariffs should not affect us as a Volkswagen Group entity in terms of our sales and distribution," he said. “Globally, for the Volkswagen Group it is disruptive. I’m sure Oliver Blume, our CEO, and the executive boards will be looking at how they allocate resources and how they deal with the impact of tariffs and any counter tariffs. But I think as a global organisation that has a good base and footprint, we would look to be able to navigate around it. “I don’t think tariffs are positive, quite frankly, for anyone. We export and import as an organisation. We move products around the world and have a big footprint. We have a big footprint in the US, where we build Volkswagens. We’re building a new factory there for the Scout brand. So we are heavily investing in that market and country, despite what might be said in political circles. “We do have a good footprint in the US and would like to continue to trade in the US. I think American customers like our cars, just like UK customers do. So let's hope that it doesn't escalate any further and turn into a very significant global trade war.” One area where tariffs might have an impact on the Volkswagen Group in the UK is consumer confidence, but O’Sullivan said “the best thing we can do is continue to market our products and continue to put out very, very competitive offers in the market” in response.

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VW Group UK boss: EV incentives 'ship has not sailed'

Damien O’Sullivan also called on more charging investment and promised to not restrict non-electric car sales

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VW Group UK boss: EV incentives 'ship has not sailed'

Damien O’Sullivan also called on more charging investment and promised to not restrict non-electric car sales

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