By Matthew Hodgson, tax partner and car dealership specialist at PKF Cooper Parry
With its announcement that all sales of new petrol and diesel cars will cease in the UK by 2040, the government has fired the starting pistol on an automotive revolution.
Despite cynicism in some quarters, in my view this long-overdue legislation will go through. Not only because it’s needed to tackle pollution (as Defra says, “poor air quality is the biggest environmental risk to public health in the UK”), but also because electric cars will lead to significant energy efficiency savings.
Earlier this month, Volvo committed to build electric and hybrid-only cars by 2019. And Mini has announced that its fully electric ‘EV’ will go into production in Cowley in 2019. So, the electric storm was already building. And now the government has provided the clarity needed to unleash it fully.
The implications are huge.
We’re now going to see rapid development of car battery-charging technology. For example, Nissan is committed to building an integrated UK electric network, meaning our homes will become two-way charging points, allowing us to both power up our cars and siphon electricity back into the grid. So if your car has spare charge, you will be able to sell it back to the network. This means that an exciting byproduct of this technology will be the resurgence of home solar electric systems which will enable us to create some of our own power for use in other areas.
Happily, for car obsessives like me, we’re also set to see a flood of pretty-damn-amazing vehicles rolling off the production lines. If you saw the electric, driverless Mercedes concept car that golfer Henrik Stenson arrived in at the Open at Royal Birkdale in July, you’ll know exactly what I mean. It was a thing of pure beauty! And thanks to the direction provided by the new legislation, manufacturers will now start to accelerate their R&D programmes.
In the near future, a series of scrappage schemes are also likely to appear, with cash incentives to scrap diesel and petrol cars in favour of electric vehicles. We’ll see more ‘clean air zones’ in town centres, too. For example, it won’t be long before diesel engines simply aren’t allowed inside our cities. What’s more, electric technology for midsize articulated lorries already exists and is now set to evolve even faster, particularly within the M25.
So what does this all mean? One thing’s for sure: dynamic changes are afoot in our car industry. This new legislation is the tipping point and I can’t wait to see what this pioneering new chapter brings as more jaw-dropping technology unfolds…
The Government has confirmed plans to ban the sale of new diesel and petrol cars in the UK from 2040. Environment Secretary Michael Gove says the move is part of a plan to get these vehicles off roads altogether by 2050 - with cleaner electric or hybrid cars taking their place. Under the plan, local councils could bring in charging zones for the dirtiest vehicles. The Government is going to make £255m available to local authorities so they can restrict diesel car use on polluted roads, improve public transport and change layouts. From 2020, new pollution taxes will also be levied on diesel drivers who use congested highways - specifically targeting busy roads in major towns and cities, as well as motorways such as the M4 and M32.