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A ’pay-as-you-drive’ tax should be introduced for electric vehicles (EVs) to replace lost revenues from fuel duty and VED.

That’s according to a new report, ‘The Future of Driving’, published by the think tank the Centre for Policy Studies.

It recommends that zero emission vehicles (ZEVs) should be charged a flat rate for every mile they drive, with the aim that they would still be paying significantly less than their petrol and diesel counterparts.

Everyone, the report says, would receive a set allocation of tax-free miles every year, with the allocation higher for those living in remote areas with fewer transport alternatives.

Eventually, as the share of ZEVs on the roads grows, this new per mile charging system could completely replace fuel duty and vehicle excise duty for all vehicles.

Each vehicle would be assigned a per mile rate, based on its weight to reflect wear on the roads, and charges would be collected monthly by direct debit.

“Whatever any new taxation system looks like the most important thing is that it’s simple, transparent and fair to drivers,” Nicholas Lyes, RAC

The Centre for Policy Studies says that there are a variety of technological options that could be used to implement such a scheme, ranging from low-tech (submitting your mileage manually) and mid-tech (an on-board device that transmits mileage automatically) to high-tech (GPS tracking).

However, it acknowledges that any system would need to be sensitive to privacy concerns, and let people pick the option they are most comfortable with.

To reflect the public’s concerns about fairness, drivers would receive a ‘free mileage allowance’ based on their postcode.

Drivers in remote areas with limited or non-existent public transport options would receive a higher allowance than big city drivers well-served by trains and buses.

Concessions could also be granted based on disability, low income, and so on – though such measures would involve a clear trade-off with economic efficiency.

In the long run, the report suggests that the Government may wish to combine clean air, congestion and per mile charges into a single nationwide charging scheme.

In the nearer term, however, it argues that it is better to treat congestion and air quality as the local issues that they are, while letting national Government focus on implementing a simple ‘pay as you drive’ per mile charging system for ZEVs.

The report’s co-author and energy and environment researcher at the Centre for Policy Studies, Dillon Smith, said: “Our recommendations take into account public feeling on a variety of proposals, privacy concerns, and their financial impact, and deliver a solution which can lead to fairer, better, and more efficient taxation while tackling congestion and improving air quality in our big cities.”

Tom Clougherty, research director at the think and co-author, believes that the days of motorists being a cash cow for Government are numbered.

“We shouldn’t replicate the old, punitive tax system, but it is still important that all drivers pay a fair amount for the roads they use,” he added.

“The ‘pay-as-you-drive’ approach our report recommends would meet that objective and could be phased in gradually over the next decade or so – alongside targeted, local initiatives to manage congestion and reduce air pollution.”

The report, supported by the Clean Air Fund, also shows that voters remain concerned about air quality and congestion, with significant numbers believing that Government has not done enough to tackle either.

Polling by BMG Research for the think tank shows strong support for action on both, including among 2019 Conservative voters.

However, the focus groups also made clear that local policymakers need to work harder to convince voters that these are targeted measures to improve air quality and congestion rather than purely a revenue raiser.

The report recommends improved communication strategies and hypothecation as ways to achieve this.

Just as drivers would like to see money from road taxes spent on improving the roads, it says that they also back money from clean air zones (CAZs) being used to improve transport or to help people upgrade to cleaner vehicles.

RAC head of roads policy Nicholas Lyes says it is “inevitable” a new tax system will have to be developed.

“Our research suggests drivers broadly support the principle of ‘the more you drive, the more tax you should pay’, with more than a third (36%) saying a ‘pay per mile’ system would be fairer than the current regime – although three-quarters (75%) are concerned the Government might use such a system as a way of increasing the amount they are taxed.”

He concluded: “Whatever any new taxation system looks like the most important thing is that it’s simple, transparent and fair to drivers of both conventional and electric vehicles.

“It’s essential that a new system replaces rather than runs alongside existing taxation regime.

“Ministers should also give serious consideration to ringfencing a sizeable proportion of revenues raised from a new scheme for reinvestment into our road and transport network, not least to finally end the country’s plague of potholes.”  By Graham Hill thanks to Fleet News

Fuel retailers have increased profit margins, resulting in drivers and fleets having to pay more at the pumps, the Competition and Markets Authority (CMA) has found.

The CMA says that, while the evidence shows that the majority of fuel price increases are due to global factors, such as the Russian invasion of Ukraine, indications are that higher pump prices cannot be attributed solely to factors outside the control of the retailers.

Based on evidence gathered as part of its Road Fuel market study, it has concluded that the higher prices drivers are paying at the pumps appear, in part, to reflect some weakening of competition in the road fuel retail market.

Fuel margins have increased across the retail market, it says, particularly for supermarkets over the past four years.

As a result of these increasing margins, average 2022 supermarket pump prices appear to be around 5 pence per litre (ppl) more expensive than they would have been had their average percentage margins remained at 2019 levels.

Although supermarkets still tend to be the cheapest retail suppliers of fuel, evidence from internal documents indicates that at least one supermarket has significantly increased its internal forward-looking margin targets over this period, according to the CMA.

It did not name the supermarket but added that other supermarkets have recognised this change in approach and may have adjusted their pricing behaviour accordingly.

The CMA is also concerned that it may be seeing evidence of weaker competition in diesel, as compared with petrol, since the beginning of 2023.

RAC fuel spokesman Simon Williams said: “We are very pleased to hear that the Competition and Markets Authority has confirmed what we have been saying for a long time about the biggest retailers taking more margin per litre on fuel than they have in the past.

“Currently, the average price of diesel is more than 20p a litre overpriced simply because they refuse to cut their prices.

“The wholesale price of diesel is actually 4p lower than petrol, yet across the country it is being sold for 9p a litre more – 154.31p compared to 144.95p for unleaded.

“Something badly needs to change to give drivers who depend on their vehicles every day a fair deal at the pumps. We hope even better news will be forthcoming later this summer.”

The CMA says that, while some degree of variation in diesel retail margin is to be expected given the high levels of volatility in diesel wholesale prices, the high margins in 2023 appear to have gone on longer than would be expected.

It said it needed to understand whether weaker competition is part of the explanation for this.

The CMA added: “While the level of engagement with the study has varied across supermarkets, we are not satisfied that they have all been sufficiently forthcoming with the evidence they have provided.

“In particular, important information has only been received late in the day and after several rounds of information gathering.

“Given the concerns we have about a market of such importance to millions of drivers it is vital we get to the bottom of what is going on.”

The CMA will now conduct formal interviews with the supermarkets’ senior management in order to get to the heart of the issues.

Gordon Balmer, executive director of the Petrol Retailers Association, said: “The CMA have made supermarkets the focus of their update, noting only that non-supermarket retailers are traditionally price followers in the market.

“As noted by the CMA, petrol and diesel prices are still volatile due to the ongoing war in Ukraine. The market is very dynamic and independent forecourts are in many cases undercutting supermarkets on price. Our advice to motorists remains to shop around.

“We have cooperated with all of the CMA’s requests for information and will continue to do so as they prepare their final report to be released.”

The CMA will issue its final report no later than July 7, covering the full range of issues it has considered in this market and setting out any further action that we think is needed. By Graham Hill thanks to Fleet News

Electric vehicles (EVs) are proving to be a third more efficient than in the coldest months, according to new data from EV payment specialist Mina.

Analysis of more than 350,000 charging events, using over 8 million kWh of electricity, from May 2022 to April 2023, show that late spring, summer and early autumn are the best months for EV batteries.

However, Mina notes that the heatwave in late July and August last year saw a spike in consumption as air con was turned up to full blast.

“Our data, recorded by thousands of electric vehicles, proves for the first time what many anecdotal reports had suggested, EVs operate far better in warm weather,” said Ashley Tate, Mina’s CEO.

Through winter, drivers were still averaging about the same amount of charge per session but, to do the same amount of work and mileage, needed an extra plug-in a week compared to September and October to account for reduced battery efficiency and other potential drains on energy such as heating the cabin.

Tate said: “One of the big questions asked about EVs is: how hard are they hit by winter? Well, now we know for sure. There are many factors involved of course, including temperature, routing, vehicle technology and driving style, but for the first time our data is able to show just what the effect is across thousands of vehicles

“By looking at consumption for each week and applying an average domestic tariff for the period of 30p per kWh, we could then show the cost of this for a typical driver. But of course, the cost could be far higher or lower depending on individual circumstances.

“If a driver has an EV specific tariff and charges exclusively at home at off-peak, the cost could be a third of that quoted, at only around £2.50 a week more. Conversely, if they only charge in public, our data shows it could at least double.”

Month  Average weekly consumption (kWh) Charges per week      Increase/decrease in consumption compared to May 22  Indicative extra weekly spend (30p per kWh) compared to May 22

Month	Average weekly consumption (kWh)	Charges per week	Increase/decrease in consumption compared to May 22	Indicative extra weekly spend (30p per kWh) compared to May 22
May 22	81.6	3.7	–	£24.48
June 22	76.6	3.8	-6.1%	-£1.50
July 22	77.7	3.7	-4.8%	+£1.17
August 22	87.6	4.0	+7.4%	+£1.80
September 22	79.8	3.6	-2.2%	-54p
October 22	78.9	3.6	-3.3%	-81p
November 22	91.7	3.8	+12.3%	+£3.03
December 22	104.9	4.6	+28.5%	+£6.99
January 23	107.5	4.7	+31.7%	+£7.77
February 23	106.8	4.6	+30.8%	+£7.56
March 23	98.6	3.9	+20.8%	+£5.10
April 23	87.7	3.5	+7.5%	+£1.83

Tate explains that it is important to put it into context and remember that the extra winter consumption is only equivalent to two extra tanks of petrol or diesel and that ICE vehicle efficiency can also be hit during winter months as well.

“With electric you have a much wider range of options,” he said. “Because we track hundreds of thousands of home and public charges and their cost, our data shows the cheapest tariffs are only around 10p per kWh at home and 30p per kWh in public.

“So if a driver wants to reduce costs, whatever the season, they need to ensure they are on the lowest possible home tariff, and search out the best value public chargers.”  By Graham Hill thanks to Fleet News

ATS Euromaster is warning that fleets making the switch to electric vehicles (EVs) need to prepare for a shift in the balance of service, maintenance and repair (SMR) spend.

EVs are expected to cost less to service, thanks in part to fewer moving parts and the absence of requirements such as oil changes, but tyre life expectancy is likely to change compared with traditional internal combustion engine (ICE) fleet vehicles, says ATS.

The tyre and maintenance provider explains that this is down to a number of factors, including the bulk of the cars. The majority are heavy SUVs, which when combined with the weight of a large battery makes them extremely heavy, while regenerative braking may also have a role in shortening the tyre replacement cycle.

However, Mark Holland, operations director at ATS Euromaster, said: “The greatest influence on the wear rate of tyres is the driver.

“With EVs there does seem to be a tendency for drivers new to electric vehicles to make continued use of the exceptional acceleration offered – at least during the initial phase of the driver’s lifecycle with the vehicle.

“The data is very young at the moment and there’s certainly not enough to draw significant conclusions about tyre wear, but driver behaviour appears to be a significant factor.”

In a recent survey conducted by Michelin, nearly 60% of drivers said they enjoyed the accelerative power of EVs and used it at every opportunity where it was safe to do so or did so during the early phase of vehicle ownership before resorting to more moderate levels of acceleration.

Holland continued: “This strongly suggests to us that fleets should prepare for accelerated tyre replacement on EVs, certainly in the first phase of driver use. It seems the novelty of the EV driving experience is having an unexpected effect on tyre wear rates.

“We would also suggest that fleets actively consider driver training before handing over a new EV to a company employee to mitigate these issues, but also as part of a broader duty of care programme.”

Fleet guidance on EVs from ATS Euromaster

• Expect accelerated tyre wear, certainly during the initial phase of driver use
• Consider driver training as part of your fleet’s decarbonisation programme with an introduction to EV technology and the different driving characteristics of EVs compared with ICE vehicles
• Monitor tyre replacement and take preventative driver action if excessive tyre wear continues or explore alternative, EV-specific tyres
• As newer EVs appear on the market, consider moving your fleet away from heavier SUV style models to EVs with less weight, which will not only improve vehicle efficiency but also SMR cost pressures

By Graham Hill thanks to Fleet News

The UK Government is working with international partners to develop new laws for monitoring the health of electric vehicle (EV) batteries.

The plans to make the fitting of battery state of health (SOH) monitors compulsory on all new EVs were discussed at last week’s meeting of the Vehicle Remarketing Association (VRA).

Abdul Chowdhury, head of vehicle policy at the Office for Zero Emission Vehicles (OZEV), explained that because the battery forms a large part of a used EV’s value and performance, providing information on its health would support consumers in making informed comparisons between vehicles and help alleviate concerns over battery degradation.

He said: “The UK government has been working with the United Nations Economic Commission for Europe (UNECE) and other international partners to develop technical regulations on SOH monitors and minimum battery performance standards and is currently analysing options for adopting these regulations into UK law.

“The EU is also considering options, and its Euro 7 proposals look set to bring SOH monitors in from July 2025.”

A battery state of health (SOH) is an estimate of a battery’s remaining total capacity, compared to the total capacity at the EV’s production.

The Global Technical Regulations on EV batteries developed at UNECE, where many international automotive standards and regulations are set, cover two key aspects.

The first is to mandate installation of SOH monitors on EVs which must be accessible to the consumer, meet accuracy requirements and be validated through in-service testing.

The second is to set a minimum performance standard of 80% SOH from 0-5 years old or 100,000km, whichever comes first, and 70% SOH for vehicles between 5-8 years old or 100,000 to 160,000km, whichever comes first.

Other areas where OZEV was looking to provide support to the used EV sector included providing standardised EV information to customers at the point of sale and helping to ensure that sufficient numbers of technicians were trained to repair EVs.

Chowdhury continued: “The used market is critical to the UK’s transition to zero emission vehicles and meeting our net zero ambitions.

“It is where 80% of all cars are bought and sold, and as we move from early EV adopters to a mass transition, its health is critical to ensuring a fair and equitable transition for all.”

Government support has included financial incentives to stimulate the new EV market and increase the supply of vehicles feeding through to the used market.

Funding for charge point infrastructure at homes, workplaces, residential streets and across the wider roads network is also supporting consumers to buy used EVs, added Chowdhury.

The potential for legislation around battery monitoring comes as an advisory group of battery experts is being assembled to explore ways of promoting greater confidence in the used EV market.

Organised by the British Vehicle Rental and Leasing Association (BVRLA), the half-day event – Battery health: supercharge your knowledge – will take place on May 16

At the VRA event, members heard that there are no Government plans for direct financial support for used EV purchases. However, it says that all policy options are continually under review and OZEV closely monitor the health of the used market and are always open to receiving any evidence.

“Used EVs continue to be among the most-discussed topics in remarketing and being able to hear directly from someone such as Abdul at the centre of Government thinking was fascinating and provided a high level of insight for VRA members,” said VRA chair Philip Nothard.

The event also featured a panel discussion on the used EV market and used vehicle supply in general featuring Phill Jones, chief operating officer at eBay Motors Group; Greg Smith, commercial director at Carshop Supermarket; and Michael Tomalin, CEO at both City Auctions Group and PurpleRock.  By Graham Hill thanks to Fleet News

I warned about this situation and have mentioned it in my book on the Highway Code. In case you don’t have a copy it’s free when you buy a copy of Electric Cars – The Truth Revealed 2023.

The RAC has identified problems with nine-in-10 yellow box junctions where councils want to enforce moving traffic offences, leaving drivers at risk of being unfairly fined.

The Government announced two years ago that it would let councils outside London, rather than the police, enforce against moving traffic offences.

Some 27 local authorities have applied to Government for permission to enforce 111 yellow box junctions, a new study from the RAC reveals.

It commissioned chartered engineer Sam Wright, who was responsible for the design and approval of yellow boxes on the Transport for London (TfL) road network, to review the applications.

Following analysis of the application sites, the RAC believes there are issues with 90% of the boxes which are likely to lead to drivers being fined unfairly.

In fact, more than half (55%) directly contravene the current Government guidance, sometimes on multiple counts.

The junction breaches include: 40 that pose visibility issues for drivers; 16 that are on the side of the road opposite T-junctions which the Department for Transport (DfT) states serves ‘no useful purpose’; 18 that extend beyond junctions such that they may be considered non-complaint with the regulations; and nine that are in non-permitted locations according to the regulations.

Wright said: “Many of the boxes have been around for years, perhaps decades. It appears that many authorities have simply assumed that the boxes already on the ground are suitable for enforcement without carrying out a fresh assessment as is recommended in Government guidance.

“There are many changes needed to improve yellow box law and enforcement. However, as a minimum it is not unreasonable to expect that authorities should undertake comprehensive audits of boxes prior to enforcement to assess all issues.

“Unfortunately, there is no evidence in any of the consultations that such audits have been carried out. This means action is needed by the Department for Transport to both review existing guidance and compel mandatory audits prior to enforcement. We believe this will help to ensure transparency and fairness in enforcement.”

‘Lack’ of knowledge and understanding

Wright, who runs the website Yellow Box Guru, wrote a report on best practice for enforcing box junctions for the RAC, last year.  

It highlighted gaps in the DfT’s guidance and a general lack of knowledge and understanding that could lead to many unfair fines being issued.

RAC roads spokesperson Simon Williams said: “Unfortunately, it seems many of the concerns we highlighted a year ago have started to become a reality.

“The issue of box size is not adequately addressed in the Government’s guidance which means many drivers will end up being unfairly fined.”

The purpose of yellow boxes is to prevent the blocking of ‘cross’ or ‘through’ traffic movements. If a box, or part of a box, does not protect a cross movement, it serves no purpose and any fine issued there is unnecessary.

Two of the biggest issues with many of the yellow box junctions that councils are looking to enforce relate to visibility and size – something that’s covered by the official guidance and has been reiterated by the previous chief adjudicator of the Traffic Penalty Tribunal.

Drivers need clear visibility of the box, and where it ends, in order to comply with their duty to only enter it if their exit is clear. If visibility is unclear, then fines are unfair.

Unfortunately, consultations have shown that many of the boxes proposed to be enforced do not conform with this requirement because visibility is blocked, boxes are too large for drivers to see where they end, or they simply do not cover cross movements.

The report’s findings show 90 (81%) of the boxes proposed for enforcement are unnecessarily large and 40 boxes (36%) have visibility issues.

In some cases, drivers can’t even see there is a box present because of faded road markings, let alone where it ends.

Wright said: “Visibility issues are connected to the road layout, topography, buildings, box length, street furniture, trees, or a combination of these.

“While many boxes are barely visible at the moment due to a lack of maintenance, I chose to ignore this on the assumption that lines will be refreshed prior to enforcement.

“Crucially, I haven’t seen a single proposal that reviews the visibility of the box from a driver’s point of view. If you also factor in bad weather, poor light and other vehicles, then the poor visibility situation is exacerbated. This is all very concerning, especially as enforcement is carried out via cameras high in the air.”

The RAC review also found councils are planning to enforce 16 boxes at the far side of T-junctions, something which goes against the DfT guidance which states: ‘A half‐box on the side of the road opposite a T‐junction generally serves no useful purpose’.

There are also 18 boxes that extend beyond junctions such that they may be considered non-compliant with the regulations, based on previous rulings by adjudicators in London.

While they definitely serve no purpose, whether or not they are a breach of the regulations is not clear because the DfT does not specify exactly where junctions start and end.

Nine junctions proposed for enforcement are in locations that are not stipulated in the Traffic Signs Regulations and General Directions (2016).

These include boxes at roundabouts and gyratories without traffic lights and outside a private car park. Hertfordshire initially proposed to enforce a junction outside a private car park but dropped the idea after launching its consultation.

Williams said: “Fining people can have real financial consequences for those on the receiving end.

“Enforcing yellow boxes means that the driver of a vehicle overhanging a box by any amount for just a moment can get a ticket. Yet many drivers end up stopped or trapped in these junctions through no fault of their own.

“It is not only imperative, but a moral duty to ensure that fines are fair, justified and that the appeals’ process is consistent across the country.”

He concluded: “We urge the Government to carry out an urgent review of its yellow box junction guidance and clarify what is and isn’t enforceable. It’s vital that size and visibility issues are resolved once and for all.

“Councils should then be ordered to carry out audits of all the junctions they propose to enforce, including from the driver’s perspective. And, if adjudicators find councils have wrongly enforced junctions, they must be obliged to refund any fines issued and correct the junctions in question.”  By Graham Hill thanks to Fleet News

Diesel drivers were overcharged by 16p per litre (ppl) at the pumps in April, according to new data from the RAC.

The price of diesel fell by almost 4ppl during the month, but the RAC says it still remains at least 16p more expensive than it should be as it’s now 6p cheaper than petrol on the wholesale market.

A litre of diesel closed the month costing drivers an average of 159.43p across UK forecourts while petrol was unchanged at 146.5p.

It was the sixth month that the average pump price of diesel has fallen, but despite this the RAC claims drivers and fleets are losing out because the wholesale price of the fuel was cheaper than petrol for all of April.

A litre of wholesale diesel cost 104.88p on 28 April – down 9p in the month – whereas unleaded was 111.25p (down 6p in April).

However, apart from in Northern Ireland where diesel averages 147.47p, diesel in the rest of the UK is still 13p more expensive on the forecourt. The RAC believes drivers should really be paying around 143p at the very most for a litre of diesel.

The cost of filling a 55-litre family car with petrol now stands at £80.60. The diesel equivalent is £87.69. If diesel was being sold at the fairer price of 143p it would save drivers £9 a tank.

At the end of April the average price of unleaded at one of the big four supermarkets was 142.99p – 3.5p cheaper than the UK average.

Diesel was 2.75p cheaper than the average at 156.68p – down 3p since the start of the month.

RAC fuel spokesman Simon Williams said: “Diesel drivers across the UK mainland continue to lose out badly at the pumps. They’re paying 13p a litre more for the fuel than petrol, despite diesel being cheaper for retailers to buy on the wholesale market for all of April.

“We feel there should be an obligation on retailers to reflect wholesale price movements on their forecourts.

“Sadly, the only place this seems to happen is in Northern Ireland where a litre of diesel is, incredibly, being sold for 12p less than the UK-wide average.”

Williams explained: “Our data shows that the average retailer margin on a litre of diesel is a shocking 22p a litre compared to petrol which is around 8p.

“The long-term averages for both fuels is 7p which means retailers are making three times what they have in the past for diesel. This is hard for them to justify and equally hard for diesel drivers to swallow.

“Action at a Government level is badly needed to stop drivers being ripped off any longer. While we’re not in favour of prices being capped – as we feel this could lead to smaller retailers in rural areas not being able to compete and going out of business to the detriment of the communities they serve – we feel there should be an obligation on the biggest retailers to charge fairer prices in relation to wholesale market movements.”

He concluded: “We realise retailers need to make a profit but a margin of 22p on every litre of diesel can only be seen as outrageous and a slap in the face to those who depend on it, whether they’re consumers or businesses.”  By Graham Hill thanks to Fleet News

I’ve spoken about this a lot recently having had a test drive in a Ford Mustang Mach-E. Whilst it’s not perfect the build quality, materials and technology were easily a match for any prestige brand. As soon as people migrated from Mercedes and BMW to an unknown brand like Tesla the die was set.

Looking at the spec. and design of the VW ID7 I can’t see any traditional prestige car driver not being tempted by this amazing car. What do you think?

Volkswagen’s sleek electric ID7 upper-medium car will be almost five metres long and have a range of up to 438 miles, the manufacturer has announced.

The model, which is planned for launch this year in Europe, is one of 10 new electric models that will be launched by Volkswagen by 2026.

This year sees the introduction of a new ID3, the ID Buzz with long wheelbase and the ID7. An electric compact SUV and the production version of the ID2all are planned for 2026.

Thomas Schafer, CEO of Volkswagen Passenger Cars, said: “With the ID7, we are taking the next step in our electric offensive.

“Already by 2026 we will offer the widest electric range of all manufacturers in Europe – from the entry-level (ID2all) model for less than 25,000 Euros up to the ID7 as the new top model within the ID family.

“Our goal is to achieve an electric car share of 80% in Europe by 2030. As from 2033, Volkswagen will produce only electric vehicles in Europe.”

The ID7 is almost five metres long and the manufacturer says the powertrain has been designed to maximise range.

Depending on battery size it predicts WLTP ranges up to 700km and charging capacities of up to about 200kW.

The ID7’s cabin features a 15-inch infotainment system screen, an augmented reality head-up display, and a new air conditioning operating concept integrated on the top level of the infotainment system.

Other technologies available in the ID7 include a panoramic sunroof with smart glass which can be switched between opaque and transparent settings by touch control, as well as Climatronic front seats which offer cooling and heating as well as a drying function.

Travel Assist technology can support assisted lane changing on the multi-lane motorway at speeds above 56mph.

The ID7 can also independently perform assisted parking manoeuvres in different ways, including parking with memory function over a distance of up to 50m.

For this, the driver either remains sitting in the ID7 or monitors the parking procedure from outside the vehicle using the smartphone app.  By Graham Hill thanks to Fleet News.

There has been a 15.6% reduction in off-peak ultra-rapid electric vehicle (EV) charging since the start of the year, according to the March 2023 AA EV Recharge Report. 

Prices have fallen from 71p/kWh in January to 64p/kWh in March.

Furthermore, flat rate prices for slow chargers, which are traditionally found in residential areas where there is no dedicated off-street parking, dropped by 2p/kWh with the price sat at just a penny above the Energy Price Guarantee for domestic electricity costs (35p/kWh versus 34p/kWh).

Flat rate rapid charging costs, however, increased by 1p/kWh between February and March to 67 p/kWh.

Elsewhere, all other flat rate costs, peak and off-peak prices remained static.

Jack Cousens, head of roads policy at the AA, said: “The second consecutive month of falling prices on the fastest types of charging is great news and is further boosted by flat rate slow charging almost meeting parity with domestic electricity costs.”

AA EV Recharge Report, March 2023 – Flat Rates

Charge Type	Speed	March (p/kWh)	February (p/kWh)	Difference (p/kWh)	Cost to charge to 80%	Pence per mile (p/mile)
Domestic	Up to 7kW	34	34	0	£13.60	7.64
Slow	Up to 7kW	35	37	-2	£14.00	7.87
Fast	8-22kW	53	53	0	£21.20	11.91
Rapid	23-100kW	67	66	1	£26.80	15.06
Ultra-rapid	+101kW	70	71	-1	£28.00	15.73

AA EV Recharge Report, March 2023 – Peak and Off-Peak rates

Charge Type	Speed	March (p/kWh)	February (p/kWh)	Difference (p/kWh)	Cost to charge to 80%	Pence per mile (p/mile)
Slow off-peak	Up to 7kW	37	37	0	£14.80	8.31
Slow peak	Up to 7kW	72	72	0	£28.80	16.18
Fast off-peak	8-22kW	57	57	0	£22.80	12.18
Fast peak	8-22kW	75	75	0	£30.00	16.85
Rapid off-peak	23-100kW	57	57	0	£22.80	12.81
Rapid peak	23-100kW	75	75	0	£30.00	16.85
Ultra-rapid off-peak	+101kW	51	52	-1	£20.40	11.46
Ultra-rapid peak	+101kW	64	67	-3	£25.60	14.38

Calculations based on adding 80% to a Vauxhall e-Corsa, 50kW, with a WLTP range of 222 miles. Adding 80% range equates to 178 miles of range. By Graham Hill thanks to Fleet News

Tesla’s January price cut could not have come at a worse time for the used electric vehicle (EV) market, with the full impact not yet known, according to pricing experts.

The manufacturer announced overnight it was cutting the prices on the Model Y and Model 3 by thousands of pounds.

Price reductions were introduced in the US and European markets, with the Model 3 falling to £42,990 and the Model Y to £44,990, representing drops of £5,550 and £7,000 respectively, for the entry level models.

Prices were also reduced by as much as £8,000 on models higher in the range like the Model Y Performance.

Tesla’s price drop, however, comes after prices were increased last year. The manufacturer upped the prices of the Model 3 and Model Y in the UK by more than 4% – £2,300 on average – in June 2022.

Then the entry-level rear-wheel drive Tesla Model 3 saloon was the subject of a £2,500 price increase from £45,990 to £48,490, while the long-range variant of the Tesla Model Y SUV increased by £2,000 from £55,990 to £57,990.

Following the recent reduction, however, the price of a one-year-old standard range used Tesla fell by £1,400 overnight, from an average of £38,994 on January 15, to £37,599 on January 16, according to data from Auto Trader.

USED EV MARKET

Philip Nothard, insight and strategy director at Cox Automotive, told Fleet News: “With volumes of used EVs entering the market increasing by a reported 800% at the end of 2022, Tesla’s re-pricing strategy couldn’t have come at a worse time and the ripples have yet to reach the shore.

“Tesla has a different strategy from incumbent OEMs and is apparently less concerned about residual values (RVs) than its peers.

“It doesn’t have the same retail infrastructure as the incumbents, and, while that has many observers scratching their heads about how used Teslas will fare in the used market, it also means they don’t have retailers to appease either.”

However, Nothard added: “If any OEM can navigate these stormy waters, it’s probably Tesla.”

The used battery electric vehicle (BEV) market, while recording its best-ever annual performance last year with a record 71,071 units sold, a rise of 37.5%, still represents a small proportion of overall used sales.

Used BEV transactions equated to just 1% of the used market in 2022, up from 0.7% in 2021. Sales of hybrid electric vehicles (HEVs) rose 8.6% and plug-in hybrid electric vehicle (PHEVs) transactions were up 3.6%.

Combined, they represented 4.1% of the market (up from 3.3% in 2021).

NEGATIVE IMPACT ON RVs

In such a fledgling market, dramatic reductions in used values for BEV models, not just Tesla, have been reported on some models in recent weeks, according to Cap HPI.

It says that the fall in RVs was entirely expected as part of a market adjustment to values that were previously unsustainably high and does not herald a collapse in demand for BEVs.

The used value for a one-year-old Tesla Model 3 long range with 20,000 miles on the clock has fallen by £11,600, or more than 25%, since the middle of September.

Dylan Setterfield, head of forecast strategy at Cap HPI, explained: “Used values for many BEV models were strong through 2022.

“In many cases, nearly-new retail values were above list price, some by a considerable margin.

“This was clearly unsustainable and our forecasts reflected that, with large negative adjustments applied.”

Looking beyond Tesla, Nothard says there is no doubt that used EVs are under “scrutiny and pressure”, and they will be so for the foreseeable future.

He explained: “It’s a complex landscape with a demand versus supply imbalance, the price disparity between EV and ICE (internal combustion engine) and ongoing consumer concerns about charging infrastructure is coinciding with inflation and a cost-of-living crisis.”

However, he stressed: “It’s important to remember that all used vehicles, including electric ones, increased in value post-pandemic because of the shortage of new cars in the market. So, while we are in a depreciating marketplace with values dropping, prices remain inside the expected parameters in the main.

“The other dynamic we’re seeing is a firming up of ICE vehicle values. As we enter a third year in new vehicle supply shortages, coupled with a decline in the number of petrol and diesel derivatives in the overall new vehicle parc, we could see used ICE values increase as demand remains strong.”

He added: “We still have to determine used EVs’ final position in the market, and there may be some pain before finding the right level. But their prices will stabilise at some juncture – it’s a matter of when and not if.”

Jon Lawes, managing director at Novuna Vehicle Solutions, told Fleet News the used EV market had experienced price drops in recent months as the number of used vehicles returning to the market started to increase.

“The decrease in Tesla list prices looks like it has had a negative impact on confidence, but, in many cases, the used value reductions have just shifted models to more sensible levels,” he said.

“In general, EVs still command a significant premium over comparable ICE vehicles and, while the Tesla price drop may have shaken confidence in the market today, leasing companies are forecasting residual values for three-and-four-years’ time for new contracts.

“Price reductions are bound to be a hurdle to navigate on the road to EV mass adoption.”

FLEETS MANAGE FALLOUT

Lorna McAtear, fleet manager at National Grid, told Fleet News at 10, that, following the Tesla price cut, she had received a “barrage” of emails.

“Tesla is one of those companies that, as a fleet manager, you love and hate in equal measures,” she said.

“It’s an absolute headache, but we will end up with more vehicles back in price brackets that our drivers can get a hold of again in their banding.”

Meanwhile, Association of Fleet Professionals (AFP) chair Paul Hollick says both leasing companies and fleet managers hoped it would have been more of a “contained change”.

“It just got dropped on us, which, for me, proves that Tesla is not a car for corporate fleets,” he said. “It’s a retail solution.”  

Hollick says it could also be an issue for those that have just bought Teslas or have them on order at previous prices.

“The differences between the new and the old prices are substantial, and a move of this kind does, unavoidably, create ill-feeling,” he said.

“The company would do well to introduce some kind of redress.”

A Tesla spokesperson said that any customers with orders should contact their sales representative to discuss the price changes.

In a statement, Tesla said: “Our focus on continuous product improvement through original engineering and manufacturing processes has further optimised our ability to make the best product for an industry-leading cost.

“As we exit what has been a turbulent year of supply chain disruptions, we have observed a normalisation of some of the cost inflation, giving us the confidence to pass these through to our customers.”

Lawes believes that Tesla’s price drop is a sign that they are facing competition from existing and new entrants, and the recognition of a price point that could be unattainable to many. “The demand for their product is still there, they just need their target audience to be able to access it,” he said.

NOT FOLLOWING TESLA’S LEAD

The Tesla Model Y was the most popular EV in Europe in 2022, according to data from Jato Dynamics.

The manufacturer sold 137,052 Model Ys in Europe giving it significant headway against rival vehicles. The second best-selling EV was the Tesla Model 3, with 91,475 registrations.

However, Tesla’s combined performance was not enough to secure the position of leading EV manufacturer.

Volkswagen Group was the best-performing brand by volume, with 349,200 EVs registered across Europe in 2022.

Fleets hoping that other EV makers would follow Tesla’s lead in cutting the prices of plug-in products will be left disappointed.

Stellantis, the parent company of several major brands, including Vauxhall, Citroën, Peugeot, Fiat and Alfa Romeo, told Fleet News it had “no plans” to follow Tesla’s lead by cutting prices.

It was a similar story at Volkswagen Group, responsible for VW, Audi, Škoda and Seat brands, which confirmed it would not be cutting plug-in prices any time soon.

“Our BEV order backlogs carry well into 2023, with some models already sold out for 2023,” said a VW Group spokesperson. “Our priority now is to deliver the vehicles to customers.

“We will continue to closely monitor further developments in both the cost and market situation for all-electric vehicles in all core markets and take appropriate action if necessary.

“As a matter of principle, we do not focus on the quantity of our business, but on its quality. High profitability, therefore, takes precedence over high volumes.”

Kia UK also has no plans to cut prices on any of its current EVs. A Kia spokesperson said: “We believe to do so would be detrimental to our relationships with private and fleet customers, and the residual values of our vehicles.”

Ford announced it was cutting prices of its electric Mustang Mach-E crossover weeks after the Tesla announcement.

However, its decision to lower pricing of the Mach-E by an average of about $4,500 (approx. £3,700), dependent on the model, will only be available in the US.  By Graham Hill thanks to Fleet News