Since the shock victory for the ‘leave’ camp in the referendum on the UK’s membership of the European Union back in June 2016, the political and economic life of the United Kingdom has been dominated by one theme: Brexit.
With the date for leaving the European Union – March 29, at 11 pm local time – now fast approaching, the Conservative government has proved unable to get Parliament to agree on the separation deal it reached with the European Union.
This is increasing the risk of a ‘no-deal Brexit’, with the UK suddenly crashing out of all the entire system of rules, agreements and treaties that govern much of its international economic relations. Most observers agree that would cause grave harm to the British economy.
Meanwhile, industry is reacting to the continued uncertainty by delaying investments or moving abroad. Big financial and industrial concerns have been moving significant staff in significant numbers and/or corporate headquarters to within the remaining EU.
In early February, Nissan announced it would not build the new X-Trail at its Sunderland factory, and later the same month, Honda announced it would close its plant in Swindon by 2022, with the loss of all 3,500 jobs at the plant and many thousands more in the supply chain.
At this particular, peculiar moment in British history, all still seems possible. Not just a ‘no-deal’ Brexit, but also an ‘orderly’ Brexit, with the EU and the UK resolving their disagreements on the exit deal at the last minute; and even a delayed Brexit or possibly even no Brexit – if the national mood, which opinion polls seem to indicate has turned against leaving the EU, finds an expression in the political process, either via a second referendum or via a parliamentary initiative.
However, the most likely outcome still is that Brexit will happen. The question is how ‘hard’ or ‘soft’ it will be, and that will determine how negative the impact on the British economy is likely to be.
Even though Brexit hasn’t happened yet, it is already impacting the economy, which due to the uncertainty (and the global economic slowdown) is growing at the slowest pace in 10 years. The Bank of England has already revised its forecast for economic growth in 2019 downward from 1.7% to 1.2%.
Chapter 1: Economic and business environment
66.8 million (2019 estimate)
|Major cities|| |
London (8.6 million), Birmingham (1.2 million), Glasgow (801,000), Leeds (761,000), Bristol (617,000), Liverpool (552,000), Manchester (520,000), Sheffield (518,000), Edinburgh (482,000), Cardiff (447,000).
Source: The Geographist
$2.936 trillion (2018 estimate), the 5th-largest in the world
|Unemployment rate|| |
4% (Q4, 2018)
Source: Trading Economics
|Main industries|| |
Financial services, IT, construction, oil and gas, government, healthcare
Pound sterling (£)
|Interest rate|| |
0.75% (December 2018)
Source: Trading Economics
|Fleet Maturity Index (scaling)|| |
|Political key info|| |
The Conservative government led by Prime Minister Theresa May has a slim majority in the House of Commons only thanks to the support of the 10 MPs of the DUP, a hardline Unionist party from Northern Ireland. Mrs May’s government has been defeated numerous times, notably on Brexit, but she has survived a recent vote of confidence. However, the departure in February of three Conservative MPs to an Independent group founded by seven Labour defectors days earlier could spell trouble for the continued survival of May’s government.
1.8% (January 2019)
Source: Trading Economics
Chapter 2 : Automotive market, segments & sales
|Total Car park|| |
In 2017, there were 38.9 million licensed vehicles in the UK, of which:
Source: UK Government
|New vehicle registrations (Cars, LCV, Trucks)|| |
2018 was a turbulent year for automotive sales in the UK, with model changes, regulatory upheaval and anti-diesel policies, and ongoing declines in consumer and business confidence.
An overview of UK car sales shows a decline for the last two years:
Up to 100,000 new car registrations were lost between September and December 2018 due to WLTP and a downturn in demand. Given this, some volume was added to the forecast for 2019 – but not enough compensate.
A base case forecast for the new car market in 2019 foresees a contraction in demand, albeit of only 0.6%. However, this assumes that the UK’s departure from the European Union will maintain free trade in a transitional phase, that interest rates and inflation will not rise and that pound sterling will not devalue further.
In an upside scenario, which assumes ongoing free trade, stable inflation and interest rates and a strengthening pound, the new car market could even expand by up to 4%. On the downside, assuming the UK leaves the EU with ‘no deal’ and that WTO trading rules come into effect, consumer confidence and the economy weaken and interest rates and inflation rise, new car registrations could fall by up to 10%.
|Top 5 brands (total market)|| |
Best-selling car brands in the UK in 2018
Source: Best-selling cars
|Model preference top 5 (total market)|| |
Best-selling car models in the UK in 2018
1. Ford Fiesta (95,892 registrations)
|Dealer network (including fleet dealer network)|| |
4,900 franchised dealers
Source: National Franchised Dealers Association
In 2018, a KPMG survey indicated that between 20% and 50% of all car dealerships in the UK could close by 2025, due to the shift to online automotive retailing.
Source: Automotive Management
|Used car market/renewal cycle|| |
In 2018, 7,945,040 used cars were sold in the UK, just under 168,000 less than the previous year (-2.1%).
The used market declined less than the new-vehicle market, and still registered its third-highest result since 2001.
Counter to the new-vehicle market, the sale of used petrols declined (-4.2%) and that of used diesels increased (+0.3%).
In a marked trend, the sale of used hybrids, PHEVs, BEVs and other alt-fuel cars increased by 26.9%, but they still represent a small segment of the overall market.
The best-selling used car models in 2018 were:
1. Ford Fiesta (360,868 units)
Despite declining 3.7%, superminis remained the largest used-car segment in 2018, with 2,618,544 units sold (33% market share). All other segments also recorded declines, except dual-purpose (+9.3%) and executive cars (+2.3%).
The most popular colours for used cars were black (1.6 million), followed by silver and blue. The top three colours represented 59% of the market. Grey, the new-car favourite, only came in fourth in the used-car market.
Demand for used cars was far more resilient than for new cars in 2018. In 2019, the performance of the used car market and residual values will be dictated by the new car market as consumers may opt for a used car more than a new car given the current climate.
The current residual value outlook calls for stability in residual values in the 12 month/20,000km scenario in 2019. In the 36 month/60,000km scenario, the forecast is that values will fall by 1% in 2019. These assumptions will naturally change if the trend of consumers opting more for used cars than new materialises.
Chapter 3: Company car market
|Total Fleet Park (company cars)/Fleet penetration in total fleet sales|| |
Despite the corporate market’s much higher share in new-car sales, the penetration of company-registered cars in the whole licensed-car stock in the UK was much lower.
This indicates that cars tend to move quite swiftly from the company market to the private market. At just 8.9% in 2017, that represents a total of around 2.9 million fleet cars in operation.
Source: Department for Transport
|Evolution fleet sales (last 5 years)|| |
Source: SMMT/Department for Transport/Car Magazine
Number of True Fleet registrations
|Top 5 fleet brands (fleet market)|| |
(figures for August 2018)
|Fleet Model preference top 5 (fleet market)|| |
1. Vauxhall Corsa
Chapter 4: Taxation & legislation
Get the complete analysis about taxation and legislation in the Fleet Europe Taxation Guide, developed in collaboration with PWC. Click here for more info
1. Car Taxation
1.1. Registration Tax
• On 1 April 2018, the latest set of changes to registration tax for new cars (sometimes known as ‘Showroom Tax’) came into force. It introduced new, higher rates for the most polluting diesel cars on sale.
• For cars registered before 1 March 2001, the registration charge is based upon engine size.
• New cars registered between 1 March 2001 and 31 March 2017 are charged VED (Vehicle Excise Duty) according to their CO2 emissions figure and fuel type.
• VED is charged on new cars registered after 1 April 2017 according to their CO2 emissions. A one-off rate is payable in the first year and a standard flat-rate in subsequent years.
• The legal keeper, who may or may not be the owner, should register the car. For example, a leased car would be registered in the name of the lessor rather than the lessee.
• For cars registered after 1 April 2017, registration and first year of road tax is usually included in the vehicle’s on-the-road (OTR) price and is based on official CO2 figures.
• Zero emission cars pay no registration fee, while at the other extreme, cars producing more than 255g/km of CO2 will face a registration fee of £2,070. For cars registered on or after March 1, 2001, the charge is based on fuel type and CO2 emissions.
• The registration tax is only payable once, at the first registration of the vehicle.
1.2. VED – (Vehicle Excise Duty) Annual Circulation Tax
• In the UK, what you pay in the first year of a car’s registration is different to what you pay in subsequent years.
• Prior to April 2017, the UK road tax system was based on carbon dioxide-based emissions figures. This has been replaced by a flat-rate annual payment for most cars
• The registered keeper of the vehicle is responsible for paying the tax.
• The tax is annual.
• As of 1 April 2018, first year VED is calculated based on the car’s CO2 emissions. There are 13 bands ranging from 0g/Km of CO2 up to over 255g/Km of CO2 and there are two rates: standard and non-Euro 6 diesels.
• From the second year onwards, tax is payable annually on the anniversary of the first registration of the car. This is £0 for electric cars, £130 for alternatively-fuelled vehicles, and £140 for petrol or diesel cars.
• Owners of vehicles with an official list price of more than £40,000 have to pay an additional £310 per year (this includes electric cars), which runs for five years after the first year (it runs from years two to six of the cars life).
• Classic cars (those registered before 1 January 1977 can qualify for road tax exemption through an owner application process.
• UK vehicle owners are no longer required to display a printed tax disc (the old system was abolished in 2014).
1.3. Kilometre charge for heavy goods vehicles of over 3.5 tons
• Annual vehicle excise duty (VED) is based on the weight and number of axles of a heavy goods vehicle (greater than 3.5 tons).
• The registered keeper of the vehicle is responsible for paying the tax.
• To calculate the tax due, see here.
• This is an annual tax.
2. Business Tax Relief
Where a car is purchased outright, the purchaser will be entitled to writing-down allowances by reference to the capital expenditure and the car’s CO2 emissions.
-- If the purchaser borrows funds to finance the purchase, the interest payable will be deductible as a revenue expense.
-- From 23 November 2016 until 31 March 2019, a 100% first year allowance is also available for expenditure on electric car charging points.
3. Value-Added Tax (VAT)
When you purchase a new car in the UK, VAT is charged at 20% of the purchase price.
– In order to understand the car rules for VAT in the UK, it is important to ascertain whether the supply is of goods or services since this determines the time of supply and, in an international context, the place of the supply. The current VAT position is set out below, but this is currently being challenged in the UK Courts and is the subject of a referral to the European Court of Justice.
– Goods: Where the possession of a car is transferred under an agreement for the sale of goods, or under an agreement that expressly contemplates that the legal title will pass at some time in the future, the supply is treated as goods for UK VAT purposes. This includes outright sale, conditional sale and hire purchase. As a supply of goods this means that VAT is due on day one on the full value of the goods. For hire purchase and conditional sales, the periodic instalments are then free of VAT. Any separate credit element is generally treated as a VAT-exempt supply. The place of supply is where the goods are located.
– Services: Anything which is not a supply of goods is a supply of services. This includes supplies made by daily rental companies and contract hire companies, as well as supplies under finance leases where it is not expected that the title will pass. In contrast to supplies of goods, VAT is due at the time of each rental payment. The VAT treatment of the lessor’s disposal of a car that has been leased to customers will depend on factors such as the type of lease under which the car was supplied and whether the customer was able to reclaim the VAT charged on the lease. The disposal of an ex-contract hire vehicle is subject to UK VAT. The disposal of an ex-hire-purchase, contract-purchase (or other conditional sale) vehicle that the lessor has repossessed is, subject to conditions, currently outside the scope of VAT if the customer could not reclaim the VAT charged on the original supply. For vehicles delivered post 31 August 2006 the sale following repossession is subject to VAT. The applicable rules for the place of supply of services of hiring out means of transport depend on who receives the supply.
3.2. Hire purchase
– A writing-down allowance based on the above is given on the full purchase price of the car as soon as it comes into use in the business, despite the fact that payment of the instalments will only begin at that time. Again, the interest element of the instalment payments will be deductible as a revenue expense.
– Operating leases (less than five years): Under an operating lease there is a restriction on the availability of a tax deduction for the rental payments. For leases entered into from 1 April 2013, cars emitting over 130g/km have 15% of all rental payments disallowed. From 1 April 2018, the CO2 emissions thresholds reduce as for capital allowances from 130g/km to 110g/km So, in 2018/19 cars with CO2 emissions of 110g/km or less are eligible for 100% of their lease payments to be written down against tax. For cars with CO2 emissions of 111g/km or more, only 85% can be written down.
– Finance leases (less than five years): A finance lease is treated in the same way as an operating lease, unless certain detailed provisions apply. A finance lessor buying a car for leasing may only claim the proportion of the writing-down allowances in the year in which the car is purchased which corresponds to the lessor’s period of ownership of the car in that accounting period. If rental payments are “rear-end loaded”, a finance lessor is taxed on the rentals according to the accounting treatment rather than the contractual entitlement to the payments, so that the tax charge is accelerated, and tax will be payable in respect of payments not yet received. There may also be restrictions on the lessor’s entitlement to capital allowances where there is a sale and finance leaseback of a car.
– Finance lease over five/seven years in length: It is very unusual for a car lease in the UK to exceed 5 years, but some prestige and specialist vehicles are subject to such leases. For all leases longer than 5 years in length special rules apply to determine the tax treatment and specialist advice should be sought.
4. Company Car
4.1. VAT due on private use of company car
-- Generally, there should be no VAT due on the private use of a company car as, instead, the employer suffers an input VAT restriction on its purchase of the vehicle. If charges are made to the employee for private use of the car, then the employer should account for VAT on these amounts as they will be treated as rental charges.
4.2. Company car in personal tax returns – benefit in kind
– The private use of a company car gives rise to a taxable benefit in the UK, which is referred to as a Benefit-in-Kind or BIK tax. The magnitude of that benefit is based on a graduated scale according to its level of CO2 emissions in grammes per kilometre applied to the price of the car. The price of the car is determined by taking the list price and adjusting for the price of certain accessories or contributions made to the cost by the employee.
-- The majority of cars registered after 1 January 1998 have an approved CO2 rating. There is no reduction to the benefit charge for business mileage or for the age of the car.
– For vehicles with emissions over 95g/km the percentage increases by 1% for each additional 5g of emissions until a cap rate of 37% is reached.
– The tax charge on electrically propelled cars is currently 13% (2018-19), and will be 16% in 2019-20, before falling to 2% in 2020-21. The previous reductions in the tax charge for hybrid cars, which are powered by either electric or petrol, and bi-fuel cars (built to run on petrol and gas), were abolished from 6 April 2011.
– Diesel cars – from the 6 April 2018 all diesel models that don’t meet the soon-to-be-implemented WLTP RDE2 regulations carry a 4% BIK surcharge over Petrol models as they emit greater amounts of harmful particulates.
5. Company car in personal tax returns – benefit in kind
5.1. Private car in the personal tax return
An individual who uses their privately-owned car for business purposes can from 6 April 2015 be reimbursed tax-free by their employer up to £0.45 per mile for the first 10,000 business miles and £0.25 per mile thereafter, regardless of the size, price or emissions of the car. These are known as the Mileage Allowance Payments (MAPs). If the individual receives less than these rates, then they can submit a mileage allowance relief claim whereby they will receive tax relief on the difference between the MAPs and the actual amount paid to them for business mileage.
5.1.1. Commuter traffic
– Commuter journeys between an employee’s home and place of work cannot be treated as business miles, whether in a private or company car.
6. Electric Vehicles
The UK government encourages the use of electric vehicles by a number of measures.
– Electric vehicles are currently exempt from Vehicle Exercise Duty (VED) if the electricity comes from an external source or an electric storage battery not connected to any source of power when the vehicle is moving.
– Owners can benefit from a 100% first-year allowance for expenditures on a car. Furthermore, electric vehicles and cars with emissions of less than 75g/km of CO2 and meet the Euro 5 standard can be exempt from the London congestion charge.
– Employers can reimburse company car drivers with an electric car at 4 pence per mile for business miles.
7. Future developments
– The Government will announce in the spring of 2019 how it will apply the WLTP CO2 figures to company car tax. The tax is based currently on NEDC figures. WLTP RDE2 ‘real-world’ regulations will be fully implemented by 2020.
– VED is subject to annual inflationary increases.
Source: Fleet Europe Guide to Fleet Management in the UK and Ireland
Chapter 5: Car policies
Sectors that provide most fleet cars include Business services; Insurance/Accountancy/Banking; Architecture/construction
Job functions that often include a company car: sales representative, service engineer, high and senior management
Reference car given to
- Entry/junior sales level: Ford Fiesta
- Senior sales/management level: BMW 3 Series
- Executive level Mercedes-Benz E-class
The UK is a mature fleet market, which means that car policies tend to be in line with those in other mature markets, with a similar emphasis on sophistication and innovation.
One difference, however, is that cash allowances as an alternative to company cars have been more common in the UK for a longer period – although the principle is now catching up in the rest of Europe, often within the context of a mobility budget.
One other issue in which the UK has had leadership is low emission zones (as in London), which – as they proliferate – will continue to push car policies towards lower-emission vehicles and/or transport alternatives.
Brexit, depending on its eventual shape, could have an impact on car policies, by changing the availability of certain (imported) vehicle models. Wider changes, due to tariffs, changes in the freedom of movement, and fluctuations of sterling's exchange rate are also likely to have some impact.
Source: Sewells Research & Insight; Fleet Europe Guide to Fleet Management in the UK and Ireland
Chapter 6: Funding methods
Despite a fall in registrations due to uncertainty over diesel, the UK remained Europe's largest fleet leasing market in 2017. In 2018, however, Germany edged ahead.
True fleet sales in the UK declined from 873,000 units in 2017 to 814,000 in 2018 (-6.8%). It was overtaken – if only just – by Germany, where True Fleet sales decreased from 843,000 to 814,000 units (-3.4%).
Generally, a high proportion of the UK new car market is taken up by fleet sales – just under 52% in 2017. Of those vehicles, more than 50% are acquired and operated under some sort of leasing arrangement. That proportion increases among larger fleets.
The UK company car sector is dominated by six large leasing companies, which between them operate more than 1 million vehicles:
• Lex Autolease 382,000 vehicles
• LeasePlan UK 168,000 vehicles
• VW Fin. Services 166,000 vehicles
• Arval UK 161,000 vehicles
• Alphabet UK 151,000 vehicles
• ALD Automotive 130,000 vehicles
While these big lease companies generally target large customers, much of the growth in the UK lease industry in recent years has come from SMEs. To accommodate the particular needs of this market segment, many large players operate in tandem with lesing brokers, often better placed to meet the needs of smaller customers.
The growing tendency towards tailor-made leasing formulas has contributed to the rise of personal leasing products. From a customer perspective, the difference beteen driving a company car and privately leasing a vehicle of one's own has become negligible. This could have a major impact on company car drivers, many of whom have seen their BiK taxation rise significantly in recent years.
New tax rules have disadvantaged so-called 'salary sacrifice schemes' (whereby drives use part of their pre-tax salary to fund a lease vehicle sourced by their company) for all but low-emission vehicles.
The current BiK system, rating cars according to their CO2 emissions, is under review pending the introduction of WLTP-based criteria.
Both developments leave company car drivers in the dark about their future BiK tax liability. This may cause a trend away from company cars, towards private leasing – the consequences of opting for what might very well be older, more polluting vehicles may have a negative impact on the environment and road safety.
Source: Fleet Europe; Fleet Europe Guide to Fleet Management in the UK and Ireland
Chapter 7: Fuel
In 2018, new-vehicle sales declined by 6.8% versus the previous year. Sales of new diesel vehicles were particularly weak – December 2018 marked the 21st consecutive month of declining diesel sales. Over the entire year, diesel fell 29.6% to a market share of just 31.7%.
Car sales increased for those powered by petrol (+8.7%) and alternative fuels (+20.9%), but this was not able to make up entirely for the losses caused by diesel.
• Sales of pure EVs were up by 13.8% to 15,474 – still just 0.7% of the total for 2018.
• Sales of 'traditional' petrol-electric hybrids grew by 21.3% to 81,156 units (3.7% of the total market).
• Sales of PHEVs grew by 24.9% but from a smaller base.
Actually, PHEV sales grew by an average of 30% in the first 10 months of the year. Following the end of the UK government's subsidy for PHEV purchases from October, they declined to +3.1% and +8.7% in the last two months of 2018 respectively. That is significantly behind the EU average.
For the second year in a row, the UK's new-car fleet average CO2 emissions rose in 2018, by 2.9% to 124.5 g/km. In 2017, it went up by just 0.8%. The rise comes despite the fact that the average new or updated model emits 8.3% less CO2 than the ones they replace. This is due in no small part to the decline in the sale of new vehicles powered by diesel, which is up to 20% more efficient than petrol. Increases in diesel sales had been instrumental in continuously reducing the new car fleet average from 189.8 g/km in 1997.
Source: SMMT, Autovista
Chapter 8 : TCO components
To get to grips with the true cost of a fleet, one needs an overview of the TCO – short for Total Cost of Ownership. These cost elements come in two categories.
On the one hand, there are direct fleet costs. These are:
- insurance (4%)
- tax (8%)
- service, maintenance and repair (3%)
- fuel consumption (23%)
- fleet management fees (1%)
(figures where available are for EU 2017)
Then there are indirect costs, which are harder to quantify but still have an impact on your TCO:
- time spent on fleet management processes and admin
- driver downtime (bad drivers can drive up company car cost by up to 15%)
- driver motivation
A structured examination of all these components and the use of critical levers, such as fleet policy and vehicle choice, can have a significant impact on your bottom line. TCO insight is key to achieving sustainable cost benefits
Source: LeasePlan, Global Fleet
Chapter 9: Safety, insurance and telematics
The UK government provides detailed information sheets with general guidance and advice on the legislative requirements in the UK for vehicle safety standards.
Source: UK government
IOTUK have produced a thorough report on the structure of the UK automotive telematics market, with a focus on the use of telematics in road safety solutions.
Vehicle insurance in the UK is mandatory, third-party insurance is the legal minimum. More on the requirements below.
Source: UK government
Chapter 10: Environment
Subject to high levels of traffic congestion and air pollution, much of which is due to emissions by road transport (51% of NOx, for example), London is a global leader in the fight for reducing traffic, and traffic pollution.
Some relevant measures:
• The Congestion Charge (°February 2003): a standard fee of £11.5 (€14) charged of most vehicles entering central London between 7 am and 6 pm on weekdays.
• The Low Emission Zone (LEZ) (°February 2008): charges for the worst-polluting diesel-powered commercial vehicles entering central London.
• The Toxicity Charge (T-Charge) (°October 2017): a temporary measure until the introduction of the ULEZ, adding £10 (€11.10) to the existing congestion charge for petrol and diesel vehicles. It applies to vehicles registered before 2006 who enter London between 7 am and 6 pm on weekdays.
• The Ultra-low Emission Zone (ULEZ) (°April 2019): will put extra charges on petrol and diesel cars entering the city. In August 2017, the Mayor of London published an Environment Strategy for the British capital. The Strategy sets out a road map for achieving compliance with EU and UK pollution limits (which are habitually transgressed in London).
The Mayor also calls for a national air quality plan in order to accelerate the phase-out of diesel and for fiscal incentives to scrap older polluting vehicles and the introduction of cleaner new ones.
From September 2018, the UK’s toughest anti-pollution measure yet has come into force in a parts of London’s inner-city borough of Hackney and Islington. The so-called Zero Emission Zone (ZEZ) will ban cars emitting more than 75 g/km between 7 am and 10 am and 4 pm and 7 pm on weekdays. If you have a diesel or petrol car, you’ll have to pay a fine of £130 (€144) when driving into the ZEZ during the restricted times.
The ULEZ, which will be introduced on 8 April 2019, will have the same dimensions as the existing Congestion Charge zone, but the Mayor proposes extending the ULEZ for heavy diesel vehicles by 2020.
Additionally, the Square Mile (i.e. the City of London) is also introducing emissions-based parking fees. Various other local initiatives are likely to follow. Some fear that the avalanche of restrictions on fossil-fuel cars entering London is confusing as well as angering commuters.
Also at issue is the lack of positive measures promoting EV uptake. Hackney council has announced plans to add 180 extra EV charging points in the borough; there currently are just 22. Additionally, Siemens has announced it will deliver 1,150 charge points in London by the end of 2020.
Source: BVRLA, Fleet Europe, Fleet Europe
The UK government has stated the ambition to eliminate the sale of new petrol and diesel cars by 2040. However, PHEVs with at least a 25 to 50 mile range would be exempt from these 'Road to Zero' plans. By 2030, the ambition is for half of all new cars to be ultra-low emission.
Source: Auto Express
Chapter 11: Mobility
Many corporate fleets have an explicitly green focus, and are intent on adopting EVs and the accompanying charging ecosystem. Others are already looking to what may be the next phase of mobility – MaaS, short for Mobility-as-a-Service.
Some MaaS applications are already finding widespread use in the UK, such as the MaaS app Whim, which is currently running in the West Midlands (i.e. Greater Birmingham). Bus company Arriva has expanded the scope of ArrivaClick, developed with U.S. company Via, which allows passengers to order a 'smart' minibus from their pick-up point at a time they want and to a destination of their choosing.
Picking up on the mobility trend, leasing companies increasingly identify as 'mobility companies', offering a widening range of mobility services beyond leasing.
In the period from 2013 to 2017, more than one million startups were registered in the UK, of which almost 400,000 were in the tech industry. With this highly developed tech and startup culture, the UK is both a developer and an early adopter of new mobility approaches.
With more than 200,000 startups in 2017, London is by far the innovation hub, with other centres being Manchester, Edinburgh, Newcastle, Liverpool and Cambridge.
Focusing on mobility startups, most provide software (20%) or a physical product (20%). Others offer a marketplace (18%) or a platform (18%). The most successful mobility startups are the ones focusing on urban systems. They provide solutions regarding multimodality, parking, green, connected, or shared mobility, MaaS, accessibility, and new energy.
Some UK mobility startups have the potential to change the market.
• Carandus.com is a 'Facebook for cars', gathering together all vehicle information in one place, eliminating the need to search different databases and documents.
• MyTag offers paperless, convenient and reliable key management.
• Cazana predicts future fleet value to help optimise today's fleet.
Chapter 12: Key trends to watch
Brexit, first and foremost
Brexit will remain the defining theme for the British economy in general, and especially for its automotive industry. The UK's automotive manufacturing is minutely interwoven with supply lines and markets in the rest of Europe, and Brexit fatally threatens both those economic chains.
While accepting the democratic outcome of the 2016 referendum, the SMMT urges the UK government to take the necessary steps to safeguard the interests of the UK automotive industry.
In the automotive trade organisation's opinion, it is essential that tariff-free access to markets in the EU and elsewhere in the world is maintained, that the UK can continue to attract talent from the EU and elsewhere, and that the UK remain a highly competitive automotive market.
However, continued uncertainty about Britain's future relationship with the EU is pushing an increasing number of automotive players to take decisions with negative impact for the UK auto industry (see Nissan and Honda, as described in the introduction).
As the likelihood of a no-deal Brexit increases, so does the chance that Britain will not have any privileged relationship with the EU when it comes to market access. And a Brexit that does not include free access to the EU's markets will be very costly for the UK automotive industry.
The SMMT has calculated that EU tariffs on cars and car parts would add at least £2.7 (€3.1) billion to the cost of automotive imports into the UK, and £1.8 (€2.1) billion to the cost of exports.
Import tariffs alone would push up the list price of cars imported from the EU into the UK by an average of £1,500 (€1,725).
In July 2018, Prime Minister May announced that the UK government would introduce a new Environment Bill, the first in 25 years. Intended to fill the regulatory gap left by the voiding of EU regulations, the Bill will concentrate on air quality, among other things.
‘Green’ car taxation
In January 2019, the UK government again rejected calls to bring forward a 2% BiK (Benefit-in-Kind) rate for pure EVs.
The government chose not to follow a recommendation made by the Business, Energy and Industrial Strategy (BEIS) Committee in the House of Commons. In a report titled 'EVs: Driving the Transition,' the Committee recommended a preferential rate for VED (Vehicle Excise Duties) on EVs and to bring forward a planned lower rate of BiK.The government argues that under the current tax system, company car drivers with EVs already get “a significant discount” compared to those with petrol or diesel cars. However, new tax bands introduced in the 2020-21 fiscal year “will focus incentives on the very cleanest cars that allow most journeys to be zero emissions”, the government promised.
Hydrogen-powered EV charging
UK company AFC Energy has demonstrated a new EV charging station that uses a hydrogen fuel call to provide power to a vehicle.
According to the company, traditional charging with electricity from fossil fuels causes pollution, while its system can be 100% emissions-free.
Called CH2ARGE, the system is the result of 10 years of R&D at the AFC Energy laboratories. It does not rely on power from the grid, so it won’t cause surges or deplete energy available in the network.
AFC Energy predicts that there could be as many as 9 million EVs on UK streets by 2030, up from around 100,000 today. This will require a massive increase in the number of charging stations, and an additional 11.5 MW of electricity.
According to the company, its solution provides a better alternative to the requirements this would make of a centralised energy-generating system.