Manufacturers Profiting From EV Grant
Discussion
At the risk of people thinking I’m trolling (because I’m quite the lurker, to be fair), I wondered if I’m missing something here or just generally being grumpy.
I’ve been trying to work out our family motoring ‘jigsaw’ for some time now and having gone round in many circles, I keep coming back to the idea of a small-ish EV.
Having become aware of the Renault 5/Alpine A290 starting to qualify for the full EV grant, I now see comments and find out that Renault have effectively pocketed the grant by playing around with the list prices and increasing the rates on the finance options. What the hell is that about?
Surely the point of these grants is to get more people into EV’s by making them a bit more affordable? Then, by getting more of them on the roads then that increases the availability of used EV’s down the line? It sits very badly with me that manufacturers can be allowed to get away with such shenanigans - it’s taxpayers money being creamed of by a manufacturer yet nobody seems to be bothered.
Perhaps our Trade & Industry Secretary, if that’s still a thing, needs to be summoning the MD of Renault UK for an explanation. Get them told in no uncertain terms that they can either help us to get these things on the roads or they’re not welcome here. It wouldn’t be hard to change the qualifying criteria to hit back. Harsh? I don’t know, as I say it just sits badly with me, even if it’s no surprise that this shower of clowns are allowing it to happen.
I’ve been trying to work out our family motoring ‘jigsaw’ for some time now and having gone round in many circles, I keep coming back to the idea of a small-ish EV.
Having become aware of the Renault 5/Alpine A290 starting to qualify for the full EV grant, I now see comments and find out that Renault have effectively pocketed the grant by playing around with the list prices and increasing the rates on the finance options. What the hell is that about?
Surely the point of these grants is to get more people into EV’s by making them a bit more affordable? Then, by getting more of them on the roads then that increases the availability of used EV’s down the line? It sits very badly with me that manufacturers can be allowed to get away with such shenanigans - it’s taxpayers money being creamed of by a manufacturer yet nobody seems to be bothered.
Perhaps our Trade & Industry Secretary, if that’s still a thing, needs to be summoning the MD of Renault UK for an explanation. Get them told in no uncertain terms that they can either help us to get these things on the roads or they’re not welcome here. It wouldn’t be hard to change the qualifying criteria to hit back. Harsh? I don’t know, as I say it just sits badly with me, even if it’s no surprise that this shower of clowns are allowing it to happen.
Renault would argue that it is just adjusting to what the market will accept and adjusting profits up/down accordingly.
The Scenic E-tech used to be start at £40,000 which meant it was in the luxury car tax band and I guess reduced EV grants (I don't know what arrangements were last year). Sales were poor as just being above that threshold meant that the cars were ultimately a lot more money/a lot less profitable.
Renault then discounted the range to all be below £40,000 except the Iconic model. I suspect that this significantly reduced profits/vehicle but meant that the car was more sellable in the UK. I doubt that this was how Renault would have priced the car if there were no market penalties/incentives causing this.
The Scenic E-tech used to be start at £40,000 which meant it was in the luxury car tax band and I guess reduced EV grants (I don't know what arrangements were last year). Sales were poor as just being above that threshold meant that the cars were ultimately a lot more money/a lot less profitable.
Renault then discounted the range to all be below £40,000 except the Iconic model. I suspect that this significantly reduced profits/vehicle but meant that the car was more sellable in the UK. I doubt that this was how Renault would have priced the car if there were no market penalties/incentives causing this.
I can see your case, but regardless of what market you talk about a commercial entity is going to manipulate their prices to maximise profit. It's more obvious with large manufacturers as the evidence is available with greater clarity. And to that point there is a website that shows the global inventory of unsold Teslas, the manufacturing rate etc and you can readily determine a correlation between inventory and price changes or available financing deals. It's obvious as tesla sets end user prices and there is no middleman. However, on a smaller scale any car dealer is going to do exactly the same thing.
So I'ld argue that an EV grant is merely another factor that is used as an input in this price calculation.
I suspect but can't prove that most ICE car manufacturers change their prices as the result of influence from petrol prices, rate of inflation etc. In other words it's not a Renault thing and it's not an EV thing...
As to whether the general tax paying public should fund an EV grant, then we may also want to include discussion of the government support of the fossil fuel industry. But this is all a bit like tax on cigarettes and alcohol being used to fund the NHS, which provides support for among other things, sufferers of alcoholism and lung cancer. Pick your poison, self medicate and be prepared to pay for your own care and where applicable that of those around you.
So I'ld argue that an EV grant is merely another factor that is used as an input in this price calculation.
I suspect but can't prove that most ICE car manufacturers change their prices as the result of influence from petrol prices, rate of inflation etc. In other words it's not a Renault thing and it's not an EV thing...
As to whether the general tax paying public should fund an EV grant, then we may also want to include discussion of the government support of the fossil fuel industry. But this is all a bit like tax on cigarettes and alcohol being used to fund the NHS, which provides support for among other things, sufferers of alcoholism and lung cancer. Pick your poison, self medicate and be prepared to pay for your own care and where applicable that of those around you.
Happens with all government grants and subsidies as a matter of course.
Years ago a friend got some quotes for solar panels and then the government introduced a scheme that pay towards them. I forget the exact numbers but the new quotes for the same thing still worked out to cost my friend almost exactly the same as it did pre grant.
Complete sham all round.
Years ago a friend got some quotes for solar panels and then the government introduced a scheme that pay towards them. I forget the exact numbers but the new quotes for the same thing still worked out to cost my friend almost exactly the same as it did pre grant.
Complete sham all round.
If I were dishing out ev grants I would stipulate only the max £3,750 grant applied to cars built (Or with significant U.K. content) in the U.K. . At the moment that would probably off the top of my head be the Leaf (Sunderland) , Puma ( drive manufactured at Halewood) and Corsa/Mokka ( Ellesmere Port) . It’s a shame Plant Oxford don’t build any electric cars at the moment. Not sure why UK taxpayer needs to be providing profit opportunities to non U.K. manufacturers.
The optics don't look great!
Car qualifies for ECG and deposit contribution get's removed, good or bad timing i'm not sure.
I've not seen a reduction in manufacturer terms for those brands which qualify.
We have seen RV's worsen for those brands with either strong terms or ECG, if anything it's the funders who are profiteering from this.
Car qualifies for ECG and deposit contribution get's removed, good or bad timing i'm not sure.
I've not seen a reduction in manufacturer terms for those brands which qualify.
We have seen RV's worsen for those brands with either strong terms or ECG, if anything it's the funders who are profiteering from this.
Thanks for some reasoned responses, it’s a big game out there with many factors at play, I know.
I wasn’t trying to single Renault out, but it seemed that when the Puma E qualified there was a load of money thrown at them, certainly though PCH deals, to get them out on the roads.
I haven’t looked any deeper at what others have or haven’t done but for me, Renault are off my Christmas card list for this and I’ll be passing on them for now. Awkward old sod that I am
I wasn’t trying to single Renault out, but it seemed that when the Puma E qualified there was a load of money thrown at them, certainly though PCH deals, to get them out on the roads.
I haven’t looked any deeper at what others have or haven’t done but for me, Renault are off my Christmas card list for this and I’ll be passing on them for now. Awkward old sod that I am
Edited by The Mad Jock on Friday 12th December 18:04
Edited by The Mad Jock on Friday 12th December 18:06
Is this serious?
Since before I had the privilege of being born there were jokes made in the popular media about how all government incentives tend to chiefly go to whoever supplies whatever the tax incentive is intended to promote
We all live in a capitalist society, the manufacturers capitalise where they can just as quickly as we do by taking advantage of a tax break when we can.
Since before I had the privilege of being born there were jokes made in the popular media about how all government incentives tend to chiefly go to whoever supplies whatever the tax incentive is intended to promote
We all live in a capitalist society, the manufacturers capitalise where they can just as quickly as we do by taking advantage of a tax break when we can.
TheDeuce said:
Is this serious?
Since before I had the privilege of being born there were jokes made in the popular media about how all government incentives tend to chiefly go to whoever supplies whatever the tax incentive is intended to promote
We all live in a capitalist society, the manufacturers capitalise where they can just as quickly as we do by taking advantage of a tax break when we can.
Easy enough to solve though. Just make it a condition of the EV grant that if the car increases in price by more than RPI the grant is removed. Since before I had the privilege of being born there were jokes made in the popular media about how all government incentives tend to chiefly go to whoever supplies whatever the tax incentive is intended to promote
We all live in a capitalist society, the manufacturers capitalise where they can just as quickly as we do by taking advantage of a tax break when we can.
Mark-ri571 said:
TheDeuce said:
Is this serious?
Since before I had the privilege of being born there were jokes made in the popular media about how all government incentives tend to chiefly go to whoever supplies whatever the tax incentive is intended to promote
We all live in a capitalist society, the manufacturers capitalise where they can just as quickly as we do by taking advantage of a tax break when we can.
Easy enough to solve though. Just make it a condition of the EV grant that if the car increases in price by more than RPI the grant is removed. Since before I had the privilege of being born there were jokes made in the popular media about how all government incentives tend to chiefly go to whoever supplies whatever the tax incentive is intended to promote
We all live in a capitalist society, the manufacturers capitalise where they can just as quickly as we do by taking advantage of a tax break when we can.
They'll always find a way to get their fat chunk of any grants. Can you find an example of an occasion in history where the government has actually managed to stop that happening?
It's going to be amusing to see this question pop up again in a few years when EU governments are trying to prop up legacy ICE manufacturers who have failed to keep pace with EV tech. I am sure the pro-ICE tax payers will delight in paying for failing industries. They will enjoy an increased tax burden while they themselves are forced via financial limitations to buy cheap EVs from China.
Grants.....I mean, they are just the worst mechanism ever created.
Renault launch the Renault 5 E-Tech. It sells incredibly well at its list price, all of the reviews and magazines say it is a great car and just what a small electric car should be (and I own one, paid full list and no grant).
The Government then wants to provide grants on electric cars. Renault initially get a partial grant and now, because they are building their batteries in France (not sure of the logic on that one) get a full grant. So there is a discount of around £3K. Well.....Renault were already selling their cars at the old price, so if the Government is going to provide a discount so that people buy more, then that sounds like a great opportunity to do a market adjustment and increase the price, and / or remove the interest rate incentives that they had.
Messing with market forces and pricing is never going to work and all it does is cost the Government and all tax payers money.
Renault launch the Renault 5 E-Tech. It sells incredibly well at its list price, all of the reviews and magazines say it is a great car and just what a small electric car should be (and I own one, paid full list and no grant).
The Government then wants to provide grants on electric cars. Renault initially get a partial grant and now, because they are building their batteries in France (not sure of the logic on that one) get a full grant. So there is a discount of around £3K. Well.....Renault were already selling their cars at the old price, so if the Government is going to provide a discount so that people buy more, then that sounds like a great opportunity to do a market adjustment and increase the price, and / or remove the interest rate incentives that they had.
Messing with market forces and pricing is never going to work and all it does is cost the Government and all tax payers money.
CharlesElliott said:
Grants.....I mean, they are just the worst mechanism ever created.
Renault launch the Renault 5 E-Tech. It sells incredibly well at its list price, all of the reviews and magazines say it is a great car and just what a small electric car should be (and I own one, paid full list and no grant).
The Government then wants to provide grants on electric cars. Renault initially get a partial grant and now, because they are building their batteries in France (not sure of the logic on that one) get a full grant. So there is a discount of around £3K. Well.....Renault were already selling their cars at the old price, so if the Government is going to provide a discount so that people buy more, then that sounds like a great opportunity to do a market adjustment and increase the price, and / or remove the interest rate incentives that they had.
Messing with market forces and pricing is never going to work and all it does is cost the Government and all tax payers money.
Lol, I sell both Renault and Alpine, so R5 and A290, we've not been struggling to sell either of them at full list, I did think it was bonkers when the grant came in and now it's more than double what it was, it's even more bonkers but happy days for Renault and Alpine dealers!Renault launch the Renault 5 E-Tech. It sells incredibly well at its list price, all of the reviews and magazines say it is a great car and just what a small electric car should be (and I own one, paid full list and no grant).
The Government then wants to provide grants on electric cars. Renault initially get a partial grant and now, because they are building their batteries in France (not sure of the logic on that one) get a full grant. So there is a discount of around £3K. Well.....Renault were already selling their cars at the old price, so if the Government is going to provide a discount so that people buy more, then that sounds like a great opportunity to do a market adjustment and increase the price, and / or remove the interest rate incentives that they had.
Messing with market forces and pricing is never going to work and all it does is cost the Government and all tax payers money.
CharlesElliott said:
Grants.....I mean, they are just the worst mechanism ever created.
Renault launch the Renault 5 E-Tech. It sells incredibly well at its list price, all of the reviews and magazines say it is a great car and just what a small electric car should be (and I own one, paid full list and no grant).
The Government then wants to provide grants on electric cars. Renault initially get a partial grant and now, because they are building their batteries in France (not sure of the logic on that one) get a full grant. So there is a discount of around £3K. Well.....Renault were already selling their cars at the old price, so if the Government is going to provide a discount so that people buy more, then that sounds like a great opportunity to do a market adjustment and increase the price, and / or remove the interest rate incentives that they had.
Messing with market forces and pricing is never going to work and all it does is cost the Government and all tax payers money.
I would argue that messing with market forces via weaponised taxation does work - it's just incredibly inefficient once everyone has had their slice of the pie!Renault launch the Renault 5 E-Tech. It sells incredibly well at its list price, all of the reviews and magazines say it is a great car and just what a small electric car should be (and I own one, paid full list and no grant).
The Government then wants to provide grants on electric cars. Renault initially get a partial grant and now, because they are building their batteries in France (not sure of the logic on that one) get a full grant. So there is a discount of around £3K. Well.....Renault were already selling their cars at the old price, so if the Government is going to provide a discount so that people buy more, then that sounds like a great opportunity to do a market adjustment and increase the price, and / or remove the interest rate incentives that they had.
Messing with market forces and pricing is never going to work and all it does is cost the Government and all tax payers money.
There's little doubt that EV's are chosen chiefly as new cars for company car drivers due to the BIK rate - I am one such early adopter specifically because if the huge savings. Tbf I wouldn't go back to ICE for the daily now even if there wasn't a tax saving - but six years ago when I had no experience of EV, it was the tax saving that swung it.
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