In a bid to improve local air quality by limiting the harmful emissions of air polluting Nitrogen Oxides (NOx) and particulate matter (PM) from older engine cars, London has taken an aggressive stance bringing in a new charging regime, in addition to the existing congestion charge, that could see fines of £160 for non-compliance.
The Ultra-Low Emission Zone (ULEZ) should come as no surprise to motorists in London, as the introduction was given the green light in 2013. However, the size of the zone is expected to increase in 2021 so businesses and motorists will need to adapt to the changing parameters overtime.
Previous incentives by the UK Government to promote diesel use saw businesses invest in those vehicles. Many have seen residual values fall in fleet stock and are now unable to invest in new, low emission vehicles. For inner city businesses, the cost of paying the ULEZ fee or changing vehicles will need to be assessed, but ultimately the introduction will impact many low margin businesses across the capital.
Other UK cities including Birmingham, Derby and Newcastle are planning similar zones and the Scottish Government have already begun phasing in a low emission Zone in Glasgow; so the concept is likely to be seen outside of the capital in the future.
This trend will further enhance demand for alternate fuel vehicles as more and more businesses and individuals opt for a hybrid or electric vehicle to avoid additional charges. However, the issue of supply could hold this up as dealerships are already struggling to get the right mix of products to cater for the changing requirements of policy and consumer demand.
Low and Ultra Low Emission Zones are just the start, as Zero Emission Zones will become the norm in years to come as UK motorists continue to make the move to full electric vehicles. Any spike in demand for alternate fuel vehicles, delays in supply and limited infrastructure to allow drivers to charge cars wherever they are will all create a perfect storm for the car industry. There is clearly a need for serious investment in all aspects of the customer journey from production, sales process and wider infrastructure to not only improve air pollution and reduce emissions; but also help the car industry adapt and flourish effectively.
For more information, please contact Kevin Lamb.