The Society of Motor Manufacturers and Traders (SMMT) released a statement today indicating that the current level of government‑backed discounts for electric vehicles (EVs) is unsustainable. The group cited a noticeable increase in consumer demand for EVs alongside a mismatch in the pace at which policy supports, stating that fiscal incentives could erode manufacturer margins and distort the market over time._2_ SMMT’s warning focuses on the economic implications of continuing such discounts without accompanying measures for supply chain resilience. By relying heavily on price reductions, automakers face pressure on profitability, especially as battery costs remain volatile. The industry body recommends a framework that balances consumer affordability with the financial health of manufacturers and the integrity of the EV supply chain._3_ The message to policymakers is clear: incentives should be calibrated to support a gradual, sustainable transition that aligns with production capacities and long‑term market stability. Adjustments may involve tiered discounts, improved leasing options, or investment in domestic battery production, ensuring the promotion of EVs does not compromise the viability of the automotive sector. The industry’s stance underlines the necessity of collaborative strategy between manufacturers, suppliers, and government bodies to achieve a realistic growth trajectory for electric mobility.
Electric Car Incentives Strike at Unsustainable Balance, Industry Group Warns