Speaking at the Eco2 Transport and Travel Conference in London recently, Michael Hurwitz of the Department for Transport, hinted that carmakers and their customers were fortunate that the Government had decided to maintain the £5,000 subsidy for ultra-low carbon cars, but warned that it could not last for more than a few years.
He said the Government believes electric delivery vans are already cost competitive with conventional vans in London, implying that subsidies for light commercial vehicles will not be forthcoming.
He also made it clear that the Government was determined to avoid “picking winners” – it was not going to back a particular technology, only to find it had invested in Betamax instead of VHS.
He was mindful of the mess that Transport for London had got itself into when it gave hybrid cars exemption from the congestion charge, leading to high CO2 Lexus LS 600 limousines paying nothing while petrol cars with half the CO2 emissions still had to pay the full amount. That was a mess that took years to fix, and the Government is not keen to repeat it nationally.
Fleet News asked him how the government was going to make up the shortfall in oil revenue if electric vehicles turned out to be a success in 10 or 15 years time.
“It is not just an electric vehicles issue,” he said. “Revenue is going to fall as fuel consumption improves from conventional engines as well.” His view was that road pricing was the logical answer – but not during the current five-year parliament.