THE Government needs to work with the fleet and motor industries on a roadmap that creates as smooth a transition as possible to the 2035 ending of petrol, diesel and hybrid car production
Meridian Vehicle Solutions Managing Director Phil Jerome, managing director said that the announcement had created an enormous number of potential pitfalls that could hurt all parts of the sector and actually damage the prospects of the adoption of electric vehicles.
He said: “The 2035 deadline is close enough that it means everyone working in the fleet and wider motor industries needs to be able to plan progress on a year-by-year basis. Much of this is because motor manufacturers are simple unable to change production quickly.
“Really, we need to have a good idea of where the Government expects us to be, almost on a year-by-year basis, and for the industry to consult on how realistic those plans might be. Just having a present start point and 2035 end point is not sufficient information.
“Why? A number of reasons. The kind of increases in penetration that we are going to see need to be paralleled step-by-step by national improvements in charger capacity – not just at work and at home but among car dealers and everyone who works in remarketing.
“We also need to have an idea of taxation plans. The Government deliberately uses the benefit-in-kind taxation rates for company cars to manipulate demand for certain kinds of vehicles and the new 0% EV rate is certain to stimulate demand.
“However, how does the Government see those EV BIK tax rates changing over time and presumably, eventually reaching a similar kind of level to those we now see for petrol and diesel cars today? The same questions also surround VED and fuel duty.
“Unless a degree of structured decision is in place, making around all of this made known as soon as possible, there is the possibility of some degree of chaos and resulting substantial financial damage. The motor industry – and the fleets that form half of its customer base in the UK – are not fast fashion where products can be changed in a fortnight. Planning what will happen in the middle of this decade is already well underway, for example.”
Phil added that the establishment of a healthy used EV market also needed to be taken into consideration when it came to making a success of the 2035 transition.
“Unless there is a predicable, stable and properly functioning used car market for the large numbers of EVs that are likely to enter the market over the next few years – and also for the run-out of petrol, diesel and hybrid models that’ll till be made – then the EV switchover will be very, very tricky because financing new and used cars will be a minefield.
“All of this needs to be taken into account and, for that to happen, everyone has to have at least some idea of what kind of playing field they’ll find at each particular point in time.”
Almost everyone within the motor industry recognised the need for the 2035 transition, Phil said, but this large number of difficult, unanswered questions needed some resolution.
“There is no question of a lack of commitment by industry professionals but there is a general feeling that we need a much higher degree of clarity to make realistic plans. The only people who can answer those questions are the Government working in conjunction with the people who make, buy, sell and finance cars. It needs to be a team effort.”
Meridian’s medium-term rental cars are supplied new from a franchise dealer on contracts ranging from 6-12 months at monthly rates that are highly competitive compared to long-term leasing.
