Hiten Sonpal, director, future mobility group at NatWest and head of specialist sectors at Lombard, speaks to Fleet World about future government plans on ULEZ and Clean Air Zone expansion and to end sales of new internal combustion-engined vehicles.
Considering the Government plans to ban diesel vehicles by 2035 or earlier, do you envision more UK cities introducing ULEZ?
Currently in the UK, five major cities have been mandated by the Government to introduce a Clean Air Zone, these are Birmingham, Leeds, Nottingham, Derby and Southampton. The Government has also named a further 23 local authorities where it expects pollution levels to reach illegal levels by 2021. They must all carry out a feasibility study to determine whether or not a Clean Air Zone is required. With greater focus on climate and air pollution I wouldn’t be surprised if we see more Clean Air Zones being introduced over the coming years.
In your opinion, is the complete replacement of petrol and diesel with electric feasible by 2035?
It really depends on carmakers and government support. Some car makers may find it difficult to make that shift from ICE to EV whereas other car makers have embraced a future in which electric vehicles prevail. We have already seen a surge in new registrations for electric vehicles in 2020 but it still forms a small part of the overall market. With new EV models being released by car makers and infrastructure growing slowly, I believe confidence will grow and people will start to look at the overall economics and the benefits of owning an EV. The Government already has initiatives in place such as the plug in car grant, OLEV grant for chargers and 0% benefit in kind tax which is all great, but I do believe we need more from the government to help accelerate the transition from ICE to EV.
How can London businesses future-proof against further emissions regulations changes?
Future proofing is switching to electric and its sensible from an economics perspective. It is really simple – take the time to explore the change to electric for your business. A lot of the times, businesses don’t know what they need until we show it to them and how this could benefit them both economically and environmentally. If you have a business driving in and out of London five days a week with a diesel vehicle – congestion charge and ULEZ costs alone equate to c£500 per month, this is the equivalent of a finance payment for an electric van. Per annum this could save the business c£6k. You then have the Road Fund Licence and fuel savings which is on top of this so the economics are greater than people may know.
Considering the current circumstances, do you foresee SMEs being able to change their vehicles in the next 12 months?
Covid has had a negative impact on many UK businesses with turnover, profits and cash levels reducing. Business owners will be trying to find ways on how they can become more efficient by reducing costs – electric vehicles can help towards this. Banks and asset financiers are making it easier to reduce the initial cost impact to improve access to EV’s, before they reach those long term benefits.
Do you envision SMEs with non-ULEZ compliant vehicles being deterred from doing business within the ULEZ as a result of rising costs?
In my opinion, if businesses don’t start to change with the times then their competition will move further forward and become more competitive from a pricing perspective because of the savings they are making by going electric. I appreciate this may not be the case for all businesses but it is really important to explore how ones business would work with an electric fleet before it is too late.
To read Lombard’s research on the ULEZ and Clean Air Zones, click here.