Ending subsidies for electric cars is a ‘step backwards’, Halfords tells Shapps Business

The Halfords boss has called on Grant Shapps to reconsider his shock decision to end the electric car subsidy scheme, calling it a “step backwards”.

The government this week unexpectedly scrapped the £1,500 grant for the purchase of new electric cars.

It will use the money saved from shutting down the system to fund public charging infrastructure, which the government has called “key obstacles to the electric vehicle transition”.

Halfords chief executive Graham Stapleton has warned the move will slow the electric car revolution.

He said: “So far, we have been greatly encouraged by the government’s commitment to make the transition to electric cars.

“However, the sudden and complete removal of the plug-in subsidy is a step backwards.

“It will delay mass adoption at a time when we need to do everything we can to help people choose greener transport options.”

Halfords will write to Mr Shapps, the Transport Secretary, asking him to reconsider his decision.

Mr Stapleton is one of many industry figures to condemn the government’s decision to cut subsidies. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the move “comes at the worst possible time”. Edmund King, AA President, said: “The plug was pulled at the wrong time.

The scheme has provided more than £1.4bn to motorists and facilitated the purchase of almost half a million electric and hybrid vehicles since its launch in 2011.

It initially started at £5,000 and was designed to cut the cost between electric cars and petrol and diesel cars. The subsidy was cut several times before being removed this week.

The government plans to support the purchase of other road vehicles in the future, such as taxis, vans, trucks, motorcycles and wheelchair accessible vehicles, where the transition needs more development. Support was always meant to be temporary, he said.

Mr Stapleton’s intervention came as he told shareholders that Halfords’ pre-tax profits would be lower in the new financial year amid economic uncertainty.

The company faces the prospect of “reduced demand, particularly for more discretionary and expensive items, and significant cost inflation.”

Shares fell 20% in early trading.

Despite the bleak outlook, Halfords recorded a 49.8% rise in pre-tax profits for the year to April 1, reaching £96.6m.

Meanwhile, total revenue rose by nearly a fifth to £1.3bn on pre-pandemic levels.

Automotive retail sales rose 6.5%, while its cycling business rose 2.7% from two years ago. However, cycling revenues were significantly lower than a year ago after a cycling boom during the pandemic.