Tag: Insight

The rising popularity of electric vehicles is creating a black hole in public finances that, if left unchecked, could see the Government lose out on £32 billion in tax. While some believe only nationwide road pricing can provide the answer, a new report suggests the groundwork is already being laid for a far simpler solution.

The report by automotive PR and communications agency loop shows that the Government could sidestep the unpopular and politically divisive issue of road pricing by introducing a simple per kWh duty on the energy used to recharge electric vehicles.

Thanks to the Electric Vehicles (Smart Charge Points) Regulations, which require all chargers installed since July 2022 to include smart functionality, the infrastructure required to implement an ‘EV duty’ is already being deployed.

“The idea of tracking individual vehicle movements continues to be unpopular, while schemes such as the London Congestion Charge and Singapore’s Electronic Road Pricing show us that any system is also likely to be frighteningly expensive,” said Alex Kefford, loop’s Head of Editorial and author of the report. “The House of Commons Transport Committee’s report on this subject concluded that they had not seen a viable alternative to telematics-based road pricing, but by running the numbers we’ve discovered that far simpler solutions do exist.”

By analysing existing revenues, the report calculated that at 26p per kWh, electric cars, motorcycles and vans would generate the same income for HM Treasury as the current road fuel duty regime, even if the country was to achieve 100% EV adoption. That level would also achieve price parity on a tax-per-mile basis, with both combustion engine and electric vehicles paying duty at roughly 5.6p per mile. For a typical EV travelling the national average mileage, that would add only £295 to the cost of a year’s motoring.

“The idea of an EV duty is unlikely to be welcomed by anyone driving an electric car. However, the Government has already signalled the end for the current favourable regime by announcing that EVs will have to start paying VED come 2025. Soon their attention will turn to recovering lost fuel duty revenue. That this problem should arise now, as EV adoption is at its highest, should be a surprise to no-one.”

The report also shows that the Treasury could afford to replace the complex array of Vehicle Excise Duty bands for vehicles over six years old with a simple flat rate, mirroring that for new vehicles, without jeopardising current revenue levels.

Together, VED (‘road tax’) and Road Fuel Duty currently raise £32 billion a year for the Exchequer – its lowest level in real terms for more than 30 years. VED, in particular, has become highly complex and is now dictated by when the vehicle was first registered, its engine capacity, fuel type, CO₂ emissions, diesel RDE standards, and even its list price when new. Many new cars will now pay three different rates of VED in their lifetimes – the ‘showroom tax’, a supplemental rate for five years, and a standard rate from then on. Meanwhile, rules orphaned by years of policy changes mean a plug-in hybrid with emissions of just 21 g/km may find itself paying £570 a year while a 299 g/km-emitting V8 Ford Mustang might pay no more than £180.

The report is available to download here.

The humble Honda C90 and trusty Triumph Bonneville are the most popular classic bikes with British enthusiasts according to a new report that details the carbon footprint of the UK’s historic motorcycles.

Following on from its earlier report that quantified the carbon footprint of the UK’s classic car parc, awarding-winning automotive PR and communications agency loop has turned its attention to classic motorcycles.

Its latest report analyses historical data stretching back more than 100 years to conclude that riding a classic motorcycle for a year has roughly the same impact as a single roundtrip flight from London to Portugal, or little more than drinking a latte a day for a year. In total, the entire classic motorcycle fleet accounts for just 0.05% of the UK’s overall transport emissions.

While famous brands such as Yamaha, Suzuki and Kawasaki dominate the sector, early pioneering marques such as Velocette, Matchless and AJS aren’t far behind, suggesting bikers are proud of their motorcycling heritage and are keen to see it preserved.

Honda is the most popular make overall, with almost 36,000 classic bikes registered for use on our roads. In second place, however, lies BSA, makers of the iconic Gold Star and Bantam, with nearly 29,000 bikes puttering about the countryside.

The report also reveals the popularity of the ‘young timers’ – relatively modern classic bikes parked up in storage, waiting to be awarded historic status by the DVLA. There, behind the omnipresent C90, lies the legendary Honda VFR750F, with more than 2,500 currently on SORN.

Drawing on years of data from official sources such as the DVLA and Department for Transport, the report offers fascinating insights into the make-up of the country’s classic motorcycle sector, how fuel efficiency and bike use have changed over time, and the part global events have played in shaping the industry.

Alex Kefford, loop’s Technical Writer and author of the report, said: “By trawling through millions of datapoints and delving into decades of archive data, we’ve been able to paint a fuller picture of the UK’s classic motorcycle scene.”

“As a result, we’ve seen the effect popular culture has had on the rise and fall of the powered two-wheeler, as well as the impact of the occasional oil crisis. But what’s surprising is how intent bikers are on keeping their motorcycling heritage alive and on the road. In fact, the average age of a UK motorcycle is now more than 15 years – the oldest figure on record.”

You can download the full report here: Download