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Wednesday December 13 2017

The Plan for 2040 - What will happen to the automotive industry?

How will the automotive industry adapt to the new legislation?

The Plan for 2040 - What will happen to the automotive industry?

In July, the government announced a plan to ban the sale of new petrol and diesel by 2040 in an attempt to clean up the air quality in the UK. This news follows in the footsteps of some of our neighbouring countries who also plan for an all-electric nation in the future. Norway plan to stop the sales of petrol and diesel by 2025 and Germany by 2030, with France working towards the same target as the UK.

But how does the UK plan to hit their 2040 plan? The UK has already witnessed a significant increase in the sale of new electric and hybrid vehicles, with the first seven months of 2017 seeing over 107,000 new electric cars registered compared with just 3,500 registrations in the whole of 2013 – but how can the UK guarantee the continuous growth of electric vehicles, and a decline in petrol and diesel?

Here, car business leasing experts, Rosedale Leasing discuss what the UK can do in the coming years to ensure they hit their 2040 plan.

Diesel Scrappage Schemes

Several manufacturers have already introduced diesel scrappage schemes, such as BMW, Audi and Ford, whilst the government has temporarily put its scrappage schemes on hold. Each diesel scrappage scheme differs per manufacturer or franchise – their aim is to act as an incentive to reward car owners for switching their old diesel cars for a low emissions alternative, with some scrappage schemes offering savings from £2,000 up to £7,000.

Despite previous government’s encouraging UK drivers to purchase diesel vehicles due to their low CO2 output, their harmful nitrogen emissions have since become apparent. Pollution caused by harmful emissions can also potentially cause heart disease or strokes, which is why the government is planning to introduce the scheme nationwide to reduce the levels of harmful toxins in the air.

Previously, the government invested £300 million into vehicle scrappage in 2009 to help clean up the air – the latest diesel scrappage scheme was put on hold in March as costs were expected to hit £2billion, however Theresa May insists that scheme will still be introduced. As the London Mayor suggests, drivers should be given a fee near to £3,000 as an incentive, although it is expected to be around £2,000 when it is passed.

Despite the government planning to launch their scrappage scheme in the near future, it’s understandable that manufacturers have grown tired of waiting and introduced their own. With the likes of Ford, BMW, Audi and Volkswagen putting schemes in place for diesel scrappage, car owners don’t have to wait for the government to benefit from scrappage incentives – this could be the beginning of the end for diesel.

The government’s plan

Whilst Teresa May has reassured the UK that their scrappage scheme will eventually go ahead, its launch date has been postponed. However, the government plan to combat some of electric vehicles’ biggest downfalls. One of which is the number of charging points across the UK. A new law outlined by the Government has stated that fuel stations must provide charging points for all electric vehicles. Motorway service stations and large fuel retailers will be required to provide convenient access to charging points throughout the UK.

A multimillion pound deal with ChargePoint was agreed upon back in May 2017, which will see InstaVolt install at least 3,000 rapid charging points at fuel station forecourts across the UK. The rapid charging points can charge up to 80% of an electric cars battery in just 20-30 minutes,

It is predicted that to make the nation all-electric, peak demand will rise by 50% according the National Grid. It Is estimated that the UK will need to build around 10,000 wind turbines to meet the demand of all the electric replacements – which could cost the government around £200 billion. But if the government plan to hit their 2040 target, they should be prepared to make the required investments.

Why electric?

Diesel cars are said to emit 50% more toxic emissions than they should, contributing to air pollution. The UK’s capital, London, is said to be the most polluted area in the country, with up to 40,000 premature deaths a year supposedly linked to the poor air quality.

Birmingham, Manchester, Bristol and Leeds all have noticeably high levels of air pollution too. Birmingham and Leeds have committed to introducing Clean Air Zones into their cities by 2020, whereby old buses, taxis, coaches and lorries will have to pay a fee when entering the zone. However, this doesn’t affect private car owners. 

According to the Department for Transport, 37 top-selling diesel cars exceed the legal emissions limit required in air pollution testing. However, electric and hybrid cars can reduce emissions by up to 40%, and help towards a cleaner air quality – hopefully, reducing the number of associated deaths. According to Nextgreencar.com, electric plug-in vehicles can reduce carbon emissions by around 40% when compared to a small petrol car, and by 25% when compared with a ‘fuel-efficient’ diesel car. These significant reductions can have a dramatic improvement on the UK’s air quality.

Thankfully, electric cars are already becoming more popular across the UK, and with the government’s plan for 2040, we can only hope that this popularity continues. 

"Electric plug-in vehicles can reduce carbon emissions by around 40 when compared to a small petrol car, and by 25 when compared with a fuel-efficient diesel car."

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