Vans excluded from EV subsidy

Date: Wednesday, December 22, 2010

The  commercial vehicle sector has voiced its disappointment at the Department for Transport’s failure to reverse the previous Government’s position on LCVs and include them in its Electric Vehicle Subsidy scheme – the £5000 incentive to encourage drivers into electric vehicles.

The DfT has not included vans because it believes passenger cars are responsible for emitting more CO2 in urban areas. A spokeswoman for the DfT told What Van?: “Vans are not covered because this project is concentrating on cars, since cars are responsible for the majority of road transport emissions.”

She said, however, that the DfT was encouraging local authorities to use electric vans through its green van scheme – the £20m Low Carbon Vehicle Procurement Programme, which the previous transport secretary, Labour’s Lord Adonis, introduced in 2009. The programme involves 200 vans being trialled in public and private fleets. The DfT will assess results from the first phase of the programme in spring 2011 when it will decide whether to extend the initiative.

The £43m EV subsidy, meanwhile, is set to cover 8600 cars until March 2012. The DfT denied vans were excluded because the fund was insufficient to cover them too, insisting it targeted the sector emitting the most CO2.

Allied Vehicles, one of the first four suppliers to the DfT’s green van scheme, said, however, that LCVs should have been covered by the EVS. Managing director Paul Nelson said: “It would allow the electric van market to have the same advantage as the electric car market.”

He said that although fleet operators were starting to order more electric vans, inclusion in the scheme “would stimulate the market”.

“Vans tend to be in the city full time and are diesels, which create more pollution,” said Nelson. “So reducing their output and that of other commercial vehicles is imperative.”

Renault is the first major manufacturer entering the electric van sector, with its Kangoo ZE going on sale next summer. Andy Heiron, Renault UK’s EV boss, said he  had expressed his disappointment at the exclusion of vans from the scheme to the Government’s Office for Low Emission Vehicles.

He said: “If it is recognised that the purchase incentive has an important role in developing the mass market then this should apply to LCVs as well. It is arguable that the large van fleets in both the public and private sectors represent the greatest opportunity for the electric vehicle when the subsidy is available. The strong desire to decarbonise transport within many businesses in these sectors should be supported and recognised.”

Robin Dickeson, the Society of Motor Manufacturers & Trader’s CV manager, said vans should be included in the EVS, but added the prevailing view of van makers is that low-carbon vehicles across the board should be subsidised. “We shouldn’t attach ourselves to one technology,” he said. “The objective is to cut carbon.”
Dickeson pointed out that the UK’s electricity, sourced from coal and gas, emitted more carbon than that of, for example, France, which uses nuclear power. “All (technologies) need a subsidy to get the volumes up,” he argued.

Dickeson said the limited range of battery-powered vehicles suited vans making short-distance, city centre deliveries, but warned the “enormous battery costs mean the equations don’t match” for most businesses. He also claimed it would take seven years for an unsubsidised electric van to become economically viable for an operator – a timespan that would wipeout the vehicle’s residual value.

Although CVs make up only about 10% of the UK’s vehicle parc, Dickeson said their presence in city centres was “absolutely necessary” in order to deliver their cargoes. In contrast, he said car journeys into city centres were largely discretionary and could often be covered by public transport. “CVs have a very different duty cycle to cars,” he said.


C-charge: Low-CO2 vans must pay


Transport for London has excluded light commercial vehicles emitting less than 100g/km CO2 from exemption to the capital’s congestion charge due to administration difficulties.

“The CO2 limit of vans and HGVs is not recorded by the DVLA, making administration of the discount very difficult,” a spokesman told What Van?
Following a consultation, passenger cars that emit up to 100g/km and meet the Euro5 standard for air quality will qualify for the Greener Vehicle Discount and not be liable to pay the charge, which will increase from £8 to £10 per day under changes to the scheme that will come into force on 4 January 2011.

But although TfL claimed the GVD would incentivise customers to switch to cleaner cars, the spokesman said: “It is considered that a discount for commercial vehicles is unlikely to incentivise the uptake of the cleanest vehicles as it is a small amount of the running cost.”
TfL argued that a van’s running costs must also include the driver’s wages and said, with the exception of unladen vans, CO2 emissions were hard to gauge.Aside from electric vehicles, TfL added that currently only the Ford Fiesta van achieved emissions below 100g/km.

Vans are included in the 100% discount for fully electric vehicles, which TfL is to extend to cover plug-in hybrid electric vehicles from next year. However, LPG vans, which qualify for the current Alternative Fuel Discount, will become liable for the congestion charge from 24 December 2012.


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