Incentives Needed to Sustain Low Emission Van Market

A report published by Element Energy and commissioned by the Department for Transport assessed the market potential of ultra low emission technology for vans. They concluded that:

• the cost of ownership is 50% higher than a diesel engine equivalent,
• of those willing to pay a premium for a low emission van 10% is the maximum,
• using government oil price projections, by the year 2030 the cost of ownership will still be 10% higher than diesel

This report was put together before the Plug-In Grant was introduced and exemptions like the London Congestion Charge have not been included. However, even without this data it appears that environmentally friendly vehicle owners will not benefit dramatically from government incentives and may continue to have a higher cost of ownership for the foreseeable future.

How Can Things Be Improved?

Based on this report, the British Vehicle Rental and Leasing Association (BVRLA) warn the government that they need to introduce non-financial incentives in order to compensate the extra costs. It was also suggested that van manufacturers provide guaranteed buy-backs and fixed-price servicing to help reduce the risk of investment made when purchasing a low emission vehicle.

John Lewis, Chief Executive of the BVRLA, says “The government has to put its money where its mouth is by delivering the Plug-in Van Grant and other tax incentives, but they need to give operators confidence that these will be more than just short-term measures and van makers must join the party. Rather than relying on government grants to discount their vehicles, they need to produce some serious price cuts. Their current business model doesn’t work”.

Another way to limit the cost of these premiums is to find competitive van insurance quotes, to protect your green investment.

Is Low Emission Worth the Hassle?

With the development of these low emission vans, it is evident that the industry is keen to reduce its negative impact on the environment. Carbon Dioxide emissions have dramatically increased over the last 20 years and the Greenhouse Effect is gradually heating up Earth’s atmosphere. Emissions from vehicles are a great contributor with diesel being the prime culprit. In order for consumers to consider the switch worthwhile considering the current state of the economic climate, if they have to pay a premium price they need premium incentives.

 

 

 

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