Back
New Congestion Charge Policy Could Provoke Unintended Reaction, Says Marshall Leasing
25 April 2013
Feedback gathered by Marshall Leasing on the change in London congestion charging policy suggests that businesses will not be manipulated into fulfilling the Mayor of London’s electric vehicle vision, and that the increased financial burden could encourage them to look at other, contrary ways to cut costs. A number of the London-based Marshall Leasing clients questioned admitted that the new Ultra Low Emission Discount will not prompt them to buy an electric fleet to run in the capital. Instead, there was concern about how a price hike will be managed following the abolishment of the Green Vehicle Discount – and a suggestion that this could lead to a less than environmentally friendly solution being put in place once the three year ‘sunset period’ is up.
Currently, the standard London congestion charge fee is £10. Until this week, however, vehicles emitting 100g/km or less of CO2 could benefit from a Greener Vehicle Discount – while electric vehicles had their own Electric Vehicle Discount – both of which reduced the amount the driver owed to zero. Under the new plans, these two discounts have been scrapped and replaced with a single Ultra Low Emission Discount, where only electric vehicles and those that emit 75g/km or less of CO2 will benefit from exemption.
This policy change has a significant financial implication for the fleet sector – not only because many fleet operators have chosen models with low emissions specifically to benefit from the Green Vehicle Discount, but also because the business overhead will suddenly go up once the discount has run its course.
The latest change could be construed in a number of ways – including as a part of the Mayor’s push towards an electric vehicle vision for the capital. However, purchasing an all-electric fleet is not realistic for many businesses, and in the meantime adding an extra £10 per day per vehicle onto the cost of running a London fleet presents problems. In response businesses may be tempted to look at other ways to balance costs – including purchasing cheaper, less environmentally friendly vehicles.
Jonathan Ross, Sales & Marketing Director at Marshall Leasing, comments: “Far from encouraging businesses to go electric, the feedback we’ve received suggests that businesses could instead be forced to find other ways to compensate for the Green Vehicle Discount abolishment – some of which could represent a move away from low emission vehicles.
“In a week when it was reported that despite government financial incentives, only three and half thousand drivers had taken up the offer to drive electric, the proposals appear to be optimistic to say the least. From both a business and consumer perspective there are problems with the electric vehicle vision. If you think about the practical issues associated with recharging a vehicle on London’s residential streets, where parking at night outside your home is hugely problematic, you can see how the notion of an electric conversion is so hard to envisage. Until the recharging infrastructure has been sorted out it is hard to see how the change in congestion charging will result in a switch to electric.”
Back