Fleet Operations reaction to the Autumn Budget

David Bushnell, Director of Consultancy and Strategy, Fleet Operations

“Today’s Budget reaffirms the Treasury’s determination to repair public finances, but it offers little meaningful support for the electrification of transport.

“What’s more, in several key areas it risks actively undermining it, with zero-emission vehicles becoming more expensive to acquire, operate and remarket.

“The reduction in writing-down allowances for sub-50g/km vehicles is likely to increase leasing costs and penalise fleets that purchase greener vehicles outright.

“Adding new costs onto EVs at a time when the government should be encouraging adoption is counter-productive.

“The introduction of a 3p-per-mile charge for battery-electric cars and 1.5p-per-mile for Plug in Hybrids, rising annually with CPI, is particularly concerning. This increases the lifetime cost of owning an EV and by the government’s own admission, will lead to around 440,000 fewer electric car sales over the forecast period, reducing demand and destabilising used values.

“The reversal of the fuel duty freeze will further raise costs for businesses already absorbing higher wage, insurance and operating expenses. Combined with changes to vehicle taxation, today’s measures amount to a broad-based increase in the cost of mobility, with no support for fleets trying to decarbonise.

“Movement on the expensive car supplement threshold, from £40,000 to £50,000, offers some limited relief, but at the same time, it will unnecessarily penalise used buyers, with some nearly identical used vehicles being treated differently, purely based on the registration date.”

Taken together, these measures will make electrification harder, not easier. Businesses are ready to invest in cleaner vehicles, but today’s Budget sends mixed signals. It highlights the growing imbalance between fiscal tightening and the need for long-term investment in sustainable transport.”