EVs ‘doomed’ by tax move?

Renault Zoe and Vauxhall Ampera
18 Apr, 2012 9:00am Jon Morgan

Electric cars will be killed off by new company car tax rules, expert warns

The future of electric cars is doomed after the Government decided to make business users pay company car tax on low-CO2 vehicles from 2015/16. That’s the view of Mark Norman, researcher at trade expert CAP.

At present, owners running EVs as company cars don’t pay Benefit in Kind (BIK) tax, while low-emission hybrids like the Vauxhall Ampera sit in the five per cent company car tax band. From 2015, both will go into the 13 per cent band.

But Norman says the move will make electric cars not viable for business use, and prevent the kind of bulk sales that would allow makers to cut prices. Fleets bought 59 per cent of all EVs sold in 2011 and a huge 93 per cent of those sold so far this year, according to the Society of Motor Manufacturers and Traders.

But as we found out, EV makers are adamant demand will hold up. Andy Heiron, head of Renault’s UK EV programme, says electric cars still offer real financial benefits as fuel prices rise.

The end or not? Experts’ view

Mark Norman
Motor researcher, CAP

“Fleets just aren’t going to buy electric cars once exemption from BIK is lifted. By 2015/16 there will be no end of vehicles with sub-100g/km CO2 and lower prices. Why would people pay extra tax and compromise driving style?

“Unless manufacturers can get the prices of electric cars down, the future of these products looks bleak. Company car drivers aren’t likely to go for them and I can’t see there being many private buyers with £30k in their pocket to spend on a car that only does 100 miles before needing a charge.”

Andy Heiron
Head of Renault’s UK EV programme

“We don’t see it as a problem. There are still many financial reasons to run an electric car.

“At Renault, we’re aiming our electric products more towards private buyers than fleet buyers anyway. And our battery leasing scheme means list prices are competitive and BIK will be low.

“Electric cars’ low running costs are still a convincing argument, particularly with fuel prices so high. Compare prices now to how they were a few years ago and electric cars seem very attractive.”

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Are we really surprised that the Government has taken an apparent U-turn and will tax these types of vehicles? They arenb't stupid, and whilst EV's are rare today and barely worth buying, they will get better and better and there will be more and more of them (there has to be, remember we only have so much oil...) they won't want to find themselves with a major Tax defecit in years to come. Better slip this in now whilst it affects few people than face a backlash later on - is what they were thinking I'm sure! Paying a bit of tax on a company car is fair enough, it's extra income at the end of the day. The biggest problem for EV's is that they are really quite rubbish at what they claim to do. I mean the new GM Ampera is a case in point. By sticking in a petrol engine that charges the engine what they have conceded is that the car is rubbish as an entirely EV-V, because the battery technology still makes these cars about as practical as the proverbial chocolate fire-guard. So we still end up with a car that is dependant on Petrol, and one that all in all isn't actually that much more clean than a normal car - but at twice the price!

Mr Norman is being naive if he thinks that fleet buyers ignore fuel consumption choosing their vehicles. He must know fuel prices are going to rise sharply over the next few years, enough to wipe out any BIK disadvantages?

And don't forget road pricing that will definitely be introduced once these cars become popular and the tax take from petrol and diesel drops.

Plug in EVs are doomed anyway due to their too short range.

Remember when diesel used to be cheap too? Right up until the time when government realised that more diesels were being sold and they could cash in.

But as someone else pointed out, EVs will die because they only go as far as the end of the street and back. And they are too expensive.

EV's will remain a niche until battery technology improves. But such moves may reduce incentives to invest in such improvements.

They were always doomed in the first place as they are NOT the answer to replacing our petrol/diesel engines anyways.

Its about time car manufacturers just stopped all development on these white elephants and put everything in to the hydrogen celled motors, its the only sensible long term option we have right now.

EV's aren't clean cars, Where does the electricity come from that powers EV's?

Their short range and long charging time make them impractical for the vast majority.

Is hydrogen the futre? If not, I certainly don't think EV's are!

Central generation is a lot cleaner than thousands of small inefficient generators, part of the reason we don't all have small diesel gennies powering our homes. That power station isn't right under your nose either, diesel being reasonably famous for giving you cancer

100 mile range is viable for 90% of the populations commute and how hard is it to put it on charge at work/ at night? The tesla model s has a range of 300 miles, the roadster 244. Have a look at Li-air batteries and ultra capacitors if you don't think things are getting better

We currently extract most hydrogen from fossil fuels, Hydrogen is abundant, but not in forms we can use. The extraction and refinement process taking more energy than to just charge a electric car. Plus the issue of having to put in the infrastructure to re-equip the developed world for a 'hydrogen economy' is kind of difficult. More so still when there is no viable method of storing hydrogen for mass transit use

It all reminds me of when people didn't believe small turbo diesels would get anywhere in the 90s

By 2015/2016 there'll be some dodge to avoid any increase....if they really want to use an electric car.
Personally, as a retired driver I'm really considering a Renault Zoe for the simple reason that I'm not held to ransom every time I decide to put petrol in my car.
OK, there's the battery lease at £70 a month, but that's not too bad. I'm also sure that solar panels on the roof are a small price to pay for the electricity to power the car.
Sorry to say this, but there are plenty of private motorists out in the big, wide world who'd relish an electric car.

Given that atmospheric water in the form of cloud etc is the most unknown quantity when it comes to climate and climate change I find it mind boggling to think that we might embark on converting transport to vehicles that will produce millions of tonnes of water vapour into the atmoshphere. A humid climate retains heat much more than a dry climate which is why tropical rain forests are hot places. And why deserts, whilst hot in the glare of the sun, are perishingly cold at night when all the heat has dissipated. I am all for advocating a switch from burning fossil fuel but just as Electric cars have probably as many negatives as oil, so too could Hydrogen. On a cold night, have a look out of your window and watch all the neighbouring houses pouring out steam from their condensing central heating systems. Where do you think all that water goes? and what effect do you think it has. To top it all off whilst a more humid climate can raise the temperature, cloud cover itself can contribute to colder temperatures because it reflects the sun's heat back into space. This is exactly why climate predictions are completely perplexed by the effect of cloud - cloud is made of water vapour - hydrogen fuel cells produce water vapour - so not sounding such a saviour after all IMO.

I suppose in summary what we need to think about is not what we regard to be "clean" fuels or "dirty" fuels because that is a complete misnomer. It's not about what's clean o dirty it's about what will maintain a balance in nature without upsetting our ecosystem or climate. As I have pointed out, even producing pure water from Hydrogen could have a devastating effect on our planet just as burning fossil fuel does by increasing Carbon Dioxide. They both could have equally damaging effects but put a glass of oil and water side by side and human nature will think the water is clean and life giving and the oil sticky and messy. It's really not that simple.

The tesla model s has a range of 300 miles, the roadster 244. Whilst that is true, have you seen how much they cost to purchase in the first place? £90,000 approximately. How many people can afford that and even if you could, why would you buy one instead of say a Lotus Exige or Mazda MX-5 both of which can take you roughly the same distances but (and here's the really clever part) when they are almost empty, it doesn't take the best part of 10 hours to refill them.

Here's an idea. Replace the black cabs in the UK's major towns and cities with electric ones. This will reduce CO2 emissions in urban populations.

EV's are definitely NOT the future of motoring. Why has this country (once a powerhouse of engineering and creativity) not come up with a truly viable solution? We have the means AND the technology to solve the impending (at some point in the future) crisis.

Any car that does 0-62 in 3.7seconds is generally very expensive, that's on par with the likes of a 911 turbo which costs more. Add into the service and upkeep of those equivalent sports cars and suddenly it's not as expensive as implied. Same thing goes for the model s and a similar performing 5 series BMW

After driving 240 odd miles in a single sitting I would (and the highway code recommends) be taking a extended break anyway. Fast charging while you have a cuppa is a simple solution for those few times a year you intend to drive several hundred miles in a day. Is it really that difficult to read a gauge telling you to charge your car?

Your last paragraph. You know the roadster is produced in the UK right? And the research and development market here is a golden opportunity. Carbon-nano tube cells, metal-air, ultra capacitors, light weight materials.....Plenty of investment opportunities and a potential gold mine

Yes, but at least with a conventional car, I'm not going to have to replace the battery pack every 7 years at a cost of £10,000 a pop. Also, a BMW 5-series is much more practical and, if you go for the 520d, can cover many many more miles on a single tank. 967 to be exact. 3 times that of the Tesla. And you can get 5 people in it. And luggage.

Also, where does your electricity come from?

-replacing every 7 years at 10,0000
Like all those 10year old Prius that are still running? And again, Have you added up the maintenance costs of running the equivalent performing car? Remember a electric vehicle requires no oil, filters, no exhaust system, clutches, spark plugs etc. We've got electric motors from the beginning of the 20th century still running due to the simplicity and lack of wearing parts. I also get the feeling £10k figures are over exaggerated when you look at current levels of development and thinking how great batteries were 10 years ago.

- 520d
The 520d is not a equivalent performing vehicle. The model S also seats 7 and why is the total tank mileage relevant? You would struggle to do more than 300 miles in this country in a day and the car is charging while you rest, it's hardly rocket science to swap using a petrol station to reading a note on the dash saying please charge

-Also, where does your electricity come from?

Power station, central generation (even if its the likes of coal) is much more efficient than thousands of small inefficient generators (part of the reason you we don't all run generators in our gardens). Add in removing local pollution from vehicles and it's a huge benefit for public health (e.g. Diesel fumes cause cancer)

I guesstimated the price of battery pack replacement by roughly converting it from the $12,000 price tag quoted on Tesla's Wiki page.

Ok, so the Tesla Model S 85kwh Performance (not available in the UK at present) and (in my eyes) not that pretty to look at
Cost = US$85,000
300 mile range
0-62 in 4.4 seconds
Top Speed of 130mph
Battery Pack Warranty of 8 years
Extra seats are optional ($1300 more) and are rear facing

Or a Jaguar XF 2.2Di Sport (190) (my personal favourite)
Cost = £35,000
Range of 780 miles
0-60 8.0 seconds
Top speed 140mph

How about business people/reps? Surely they can cover some mega mileages every day? Not going to be viable for them is it really. Travelling up and down the motorway for a bit, run out of range miles away from home, have to find a charging point, wait, then go home.

Battery powered cars will never be viable to fit into modern life because we have built our society and livelihoods around the internal combustion engine. I agree though, that something needs to be done, I am just not convinced that battery cars are the answer. Not with the initial high price, electric prices on the rise and the waiting times involved when they run out of juice.

This is what I meant with the lack of vision in the UK of late.

That should say $12,000 for the battery pack

12,000 dollars

and the cost is 85,000 dollars

The Jag is a good comparison, the diesel however is not a similar performing vehicle. The closest ones are the 5.0 petrol ones

5.0 (Premium Luxury)
Price = £49,230.00
0-60 = 5.5 seconds

5.0 supercharged (XFR)
Price 65,380.00
0-60= 4.7seconds

Electricity prices on the rise? In comparison to fuel and road tax (have a look at the costs of new cars from April (iirc) 2010, the above jags cost over £1000 a year) it's a gentle incline to mount Everest

And again, in this country you would struggle to do more than 300 miles in a safe state of mind in a day

In one of my earlier posts I mentioned the Li-air battery. These will have near the same energy density of petrol. Add that to a petrol engines 20% efficiency against a electric motors 90% and you'll find in the future that a petrol car would struggle to out range a electric car.

Yes they're all very expensive at the moment (although looking at the price of those Jaguars and the costs to run them, I'd say not really). But so was the first petrol car, computer, mobile phone, light bulb* etc etc.

*Have a look out for a LED light 'bulb', these are also new, efficient and expensive. You can mark my words they'll go down in price in the next few years and become more widespread

From the first introduction, poor distance range, long charge rates and silly pricing, this government with be TAXING fresh air soon beware we are all doomed.