Green Cars News includes rise in electric and hybrid cars and rethink over car tax and fuel dutyJuly 3, 2008
It’s been another week when green car issues have dominated the news. Here’s a quick round up of all the latest news about green cars that you need to know.
415 per cent rise in electric car sales
Electric car sales are up by 415% and hybrid car sales are 93% higher during the first quarter of 2008 compared to the same period in 2007. This may be the first signs of a shift from diesel cars over to cars that are running on alternative fuel due to diesel price rises according to Kirk Fletcher, Managing Director of Experian’s Automotive division.
The average price of diesel fuel at the end of June reached 132.27p per litre – 22.5% higher than it was at the beginning of the year, according to figures from Experian, the global information services company.
The figures provided by Catalist, an Experian company, show the biggest increase in diesel fuel prices for the first six months of any year in the last decade.
The average price of petrol has also increased significantly to 118.9p per litre – 15.4% higher at the end of June compared to the beginning of the year.
Furthermore, while both diesel and petrol prices have been rising, diesel prices have crept up at a faster rate over the last six months. There is now an 11.2% difference between petrol and diesel prices, compared to a 4.8% difference in January 2008.
Government to review introduction of VED reforms
Proposals to increase Vehicle Excise Duty from next April are to be re-examined by Chancellor of the Exchequer Alistair Darling – however it is expected that the proposals will still go ahead, just the timescale for phasing them in may change. Any suggestions that the plans will be scrapped have been dismissed.
Green-Car-Guide believes the VED changes that are proposed for new cars in the future will help with the shift to lower emissions vehicles. These changes would see VED on some high emission cars increase by up to £245 from April 2009. The Government also plans to introduce a so-called ‘showroom’ tax – a higher rate of VED – on new cars from April 2010.
However plans to introduce the higher levels of tax retrospectively on cars registered between 2001 and 2006 is a very unfair stealth tax, as this will impact on millions of car owners who bought their vehicles up to six years before such VED changes were considered.
The Conservatives claim that the retrospective changes to VED will see up to 2.3 million paying up to twice as much road tax, between £100 and £245 more as cars registered between 2001 and 2006 are brought into the graduated VED regime.
Shadow Treasury Minister Justine Greening said: ‘Labour’s backdated VED rises will double the pain for families struggling to cope, hitting twice as many people for up to twice as much as the 10p tax fiasco.’
Despite this, the Government comfortably defeated the Conservative amendment to the Finance Bill aimed at stopping the changes.
Around 50 Labour MPs threatened to vote against the Government, but their support was won after the Chancellor promised to look again at the plan.
It is now expected that a further announcement on the shake-up of VED will be made in the autumn Pre-Budget Report.
Fuel duty increase may be put on hold
Prime Minister Gordon Brown has hinted that the Government may not go ahead with the planned 2p-a-litre increase in fuel duty scheduled for October 1.
Giving evidence to the House of Commons Liaison Committee, the Prime Minister said that past increases had not been implemented. He said: “I think you will find that in most years since 2000 that the duty has actually been frozen.”
People will drive less to save fuel bills
Almost half of motorists are ready to cut back on driving because of the soaring cost of fuel, according to a poll of 17,481 AA members.
The poll found 48% saying that they were ready to cut out short journeys by car, while 62% said they would consider buying a more efficient model.
Driving styles are also changing as fuel prices rise, with 60% of those polled saying they would stick to speed limits and be gentler on the accelerator.
In addition, just over half said they would be ready to take advantage of discounts to buy smaller ‘greener’ cars.
AA president Edmund King said: “Our poll shows that people are more concerned about MPG rather than emissions but nevertheless this has a substantial environmental benefit.”