Higher-polluting vehicles could be taxed more to encourage the continued take-up of EVs in the fleet sector, according to James Taylor, acting MD and B2B director at Stellantis UK and the person in charge of the fleet strategy of the firm’s brands from Alfa Romeo to Vauxhall.
“There should be a taxation system that incentivises electrification and zero tailpipe emissions. But it could then be cross-funded by the higher-polluting cars so, on balance, it works out the same [to government revenue].”
Stellantis launched its ‘Dare Forward 2030’ strategy earlier this year with a committment to be pure-electric in Europe from 2026 and is in the process of pushing for a 50% reduction in tailpipe emissions from its cars by that date from where it was in 2021.
As a result, Taylor is bullish about any impact on the conglomerate’s fleet sales, should the government decide to slash the benefits around EVs and company car taxes. “We're a leader on electric - as we've seen that we do very well in the segments we're in today, and as we bring more models out, we'll do well in those segments - but also our ICE vehicles are very competitive on CO2 versus their competition. So anything that disadvantages that competition versus us on ICE is also going to be a benefit.”
Taylor feels we’re now in a market that’s “demand led”, where people are asking for EVs rather than being encouraged into them. “We're quickly going to get to the tipping point where the majority of the market is electrified. Because people will think electrified first, ICE second at that point. We're on that roadmap. And I think we'll get there perhaps a little bit quicker than people are expecting.”
To Taylor, EVs will always have an advantage because he can’t see it ever being the case that the tax system will switch from favouring EVs to ICE. That’s not to say he doesn’t want the government to give more assurance on the current tax regime around EVs and benefit-in-kind rates (BIK). “To me, ideally, you want a four-year visibility because a lot of fleet cycles went to four years after the financial crash of 2008.”
He also feels that removing the grant for small cars (the government axed the electric car grant for cars costing under £32,000 in June 2022) has had a negative impact on EV uptake on the retail side of things, a “huge part of the market”.
As Taylor points out, “It’s taken away the argument that [the small EV market] is cost neutral. It was a straightforward, easy proposition to get people to switch. But you can’t say that any more because the [loss of the] grant has made them effectively £1500 more expensive. That’s where I think we need a little bit of thought.”