espite all the protests, we now know that the ULEZexpansion is going ahead after the failed efforts of five London boroughs to stop it.
Judged by the surprise Uxbridge by-election result it’s still a deeply unpopular policy. For many – even those with the best green intentions – it simply isn’t a viable financial option to pay the extra cost of driving in the extended low emission zone.
Of course we’re in favour of cleaning up London’s air quality, but the problem is that politicians haven’t taken the public with them. In the case of ULEZ we haven’t seen the right balance between carrot and stick. The scrappage scheme available for those impacted by the ULEZ expansion is far too limited and, for some, quite impractical. What’s a £2000 grant when a new electric car can cost well over £30,000? Shifting to public instead of personal transport like cars or bikes is equally impractical for many in London’s outer boroughs.
So what are the lessons? We can’t stick our fingers in our ears and ignore climate dangers. We still need to be greener – but we have to be smarter with it and use the market to ensure a fair transition.
The public aren’t anti green – the polling shows it – but many are simply dealing with the reality of life and a cost of living squeeze. But both the ULEZ expansion and the 2030 ban on the sale of internal combustion engines take the “stick” route, imposing stringent bans and costly consequences for those not complying.
Those who want to throw the baby out with the bathwater and call for a softening of the 2030 ban on the sale of new diesel and petrol cars underestimate what can be achieved with the right policies in place. EV adoption is steady – and price reductions are bringing in more converts than ever before in the used market – but at this stage we need to see rapid growth, and this won’t be achieved without appealing to the majority through wider incentives.
Why? The biggest block to mass adoption of electric vehicles is still price. There is a chasm between the early adopters able to afford the “green premium” for EVs and the majority deterred by the cost. On a like-for-like basis, a new electric vehicle is still 39% more expensive than its internal combustion engine equivalent.
We’ve seen it on our platform: when prices come down or even when energy prices are low and fuel prices high, demand goes up – people are keen to switch but at the moment, it’s not making financial sense for many.
But this is the crucial point – it doesn’t have to be a choice of pocket over planet. There are plenty of solutions that will help both consumers and industry speed up adoption – if we act now. There should be improved incentives for consumers to make the switch – taking inspiration from around the world, from parking privileges in France to no toll charges in Norway.
UK policymakers can ensure this is a fair transition by reducing VAT on used electric vehicles, or equalising VAT rates on public and private vehicle charging costs – so those without a driveway don’t get penalised. Similarly we should see low-cost finance options for EVs to help move the dial.
Building a greener, fairer society isn’t easy so rather than reaching so quickly for the “stick” – like Ulez – our political leaders have got to be balanced. Otherwise people will only see the negatives in transition. It is even more worrying that we now hear siren voices saying that abandoning green policies is the solution to our problems. That’s a dangerous path to go down. If we really want a greener, fairer future we need the carrot as well as the stick.
Nathan Coe is CEO of Auto Trader
Nathan Coe, CEO of AutoTrader
/ AutoTrader