Industry bosses used a recent summit to intensify their calls for greater clarity and a more encouraging taxation framework for fleets.
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, and Volkswagen UK boss Alex Smith, joined the chorus for more favourable tax rates for the fleet sector.
Speaking at the SMMT’s annual summit – an event dominated by discussions of Brexit and its implications on the wider automotive industry – Hawes (pictured right) said: “We want to see a fiscal framework in terms of long-term company car tax rates that encourage a transition to electric power, and we want to see a long-term commitment to incentives for businesses.”
Company Car Today understands that – as this issue went to press – the Benefit-in-Kind rates are with ministers for review and that civil servants advised on a number of ideas, including announcing future rates from anywhere between one and five years in advance. The Treasury Bill, which will contain the new tax rates, is due this month.
A Treasury source also told Company Car Todaythat despite pressure from ministers and the fleet industry, the 2020/21 2% BIK rates for EVs could not have been introduced this tax year because payroll systems had already been set.
Octopus makes EV leases easier for company car drivers
Octopus Electric Vehicles used the SMMT event to reveal its latest plan for bringing together the various strands of energy consumption.
The firm, which is a subsidiary of energy company Octopus, was launched last year and offers an all-in-one bundle for fleets.
“We offer an EV lease, a charging point for your home and also your business and a specialist energy tariff,” chief executive Fiona Howarth told Company Car Today.
Take-up has been strong among business owners, Howarth said, while she added that a salary-sacrifice option is being made available to employees.
She also welcomed the Government’s smart charger pledge and added this is long overdue. “With our smart chargers we can unlock really cheap rates of charging for people so we can reduce it to just 5p per kilowatt hour,” she added.
“Company car buyers and fleet managers are very astute about figuring out what the cost of ownership is, so there are a number of things you can do to drive down costs because the total cost of ownership is what really matters,” Hawes continued.
The SMMT boss once again reaffirmed his support for diesel fuel against plummeting demand, by saying: “Yes, we’re introducing low-emission zones in cities, but Euro6 diesels are exempt so it will be around for many years to come. For many customers – for instance, high-mileage drivers – it is the right choice and diesel offers the best benefits.”
VW boss Smith, however, believes electric power is at a tipping point – or rather, it will be when his brand’s mass-market EV, the ID3, hits the roads next year.
“There comes a point where an electric vehicle becomes a far superior choice to an internal combustion-engined vehicle. When something is demonstrably better, humans have a habit of adopting it like hell, and at the point when the ID3 arrives, that’s when the point becomes ‘why not?’, and that’s the point where we have to be thinking about a consistency of incentives and taxation,” he said during a panel discussion about the future of green technology.
“We need some help – in infrastructure, in regulation and with incentives. I’m not sure we’ve seen co-ordinated progress yet. If you’re a fleet driver choosing an EV today, you do not know what rate of BIK you will be paying before the end of a lease. You know you’re making the right environmental decision but you’re not sure you’re making the right financial decision.”
Volkswagen’s push to go electric is interesting, not least because 12 months ago its PR head, Paul Buckett, revealed that Volkswagen is losing £7000 on every electric vehicle it makes. When asked if that is still the case today by Company Car Today, Smith didn’t answer the question, and instead provided an insight into the manufacturer’s push to go electric. “The automotive business is – and always will be – a scale game and in order for us to be profitable we need to build as many units as we can,” he said. “In making the commitment with the MEB platform – 70 models by 2028 and 22 million vehicles to be produced – that gives you an idea about the commitment, and scale within our industry is the way to be profitable.”
Back to the here and now, Smith dismissed the belief that demand is outstripping EV supply across the industry. He said: “We’ve got about two months’ worth of supply of the e-Golf for immediate delivery, and I appreciate there has been some concern in the marketplace about supply and demand but I think we’re in a good spot at the moment.”
However, other car makers such as Kia and Hyundai have reported a wait of up to a year on their latest EVs, though these are cars with a significantly longer range.