CEO Update

Green buses and trucks pick up the pace

16 February 2024 #CEO Update

Zero emission vehicles are proven to benefit a broad spectrum of fleet operations and that’s clearer than ever today, with SMMT’s latest data showing the number of new electric and hydrogen trucks joining UK roads more than trebled in 2023 – while uptake in the bus market, specifically for single and double decker buses, is exceptional.

With a proportion of ZEVs almost three times greater than in the car sector, single and double decker buses are at the forefront of the UK’s transition – and, indeed, Britain boasts the biggest zero emission new bus market overall in Europe. Depot-based, circular, shorter routes make bus decarbonisation less complex than some other forms of transport, but many smaller operators with tight margins need help. This is why the Zero Emission Bus Regional Area (ZEBRA) funding is essential and must be delivered faster than in previous years. However, the story isn’t the same in the minibus sector due to a licensing restriction that impeded uptake. Category B licence derogation for driving zero emission minibuses needs urgent legislative approval so that charities, schools and other minibus customers can enjoy the same environmental and operational benefits.

SMMT’s latest figures were also hugely positive for the HGV market, with rising demand for the second year running, including for hydrogen and battery electric trucks, registrations of which grew by an impressive 265% last year. But with these vehicles still representing just a tiny fraction of the market, and HGVs weighing below 26 tonnes facing the same 2035 end of sale date as cars and vans, uptake must accelerate at pace. Operators have little time to make the switch, so we need to instil in them the confidence to make the significant investment that is required and demonstrate the investment is commercially viable. Greater and faster rollout of HGV-dedicated charging and refuelling infrastructure across the strategic road network is fundamental to that confidence so further delay is not an option.

Another vehicle type powering many businesses and sole operators across Britain is double-cab pick-ups, critical tools particularly for those in rural areas and the construction sector. HMRC’s decision this week to tax them as cars rather than commercial vehicles for benefit-in-kind (BIK) purposes was, therefore, hugely disappointing, raising costs such that they could be an untenable choice for many. The move risks stalling the overall market and its decarbonisation, as businesses will be likely to hold on to older vehicles for longer. With the new rules due in July, there is insufficient time for industry to adapt to such a major policy change, and we still maintain it would be fairer and simpler to use a vehicle’s type approval as the basis for all tax purposes. We are seeking a meeting with HMRC urgently.

SMMT, meanwhile, continues to champion the entire automotive sector at home and overseas, and Future Mobility Asia 2024, in May, provides one such opportunity, with SMMT members leading a vibrant UK pavilion. Some 17,000 visitors from more than 70 countries worldwide are expected to attend the expo in Thailand – itself an increasingly important market and the largest vehicle producer in South-East Asia. The focus will be on the whole gamut of mobility innovation – from net zero to automation, vehicles and supply chain to the aftermarket. To get involved and find out about other business development opportunities in key global markets, contact the SMMT International Team.

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