By Osman Boyner, founder and CEO of Bedeo

With the UK Budget on Wednesday (March 6), I am calling on policymakers to ensure that they are protecting, incentivising and valuing the commercial vehicle industry for the long term.

At a time when the switch to net-zero is even more complex and capital-intensive than ever, it’s crucial to protect our multi-billion-pound industry, not only for the fiscal year ahead but for our ongoing net-zero future.

The upcoming Budget presents a pivotal moment for re-evaluating incentives for electric light commercial vehicles (eLCVs) amidst shifting dynamics in the electric vehicle (EV) sector, not just because they are a prime candidate to assist with the transition to net zero.

Looking at a usage and pollution point of view, a van is said to emit approximately five times more NOx and over three times more PM2.5 annually compared to a car, primarily due to its higher annual mileage and pollutant emission rates per kilometre travelled.

While electrification numbers for light commercial vehicles (LCVs) seem promising, a closer examination reveals a concerning disparity.

The number of small to medium eLCVs masks a significant shortage in the 3.5 to 4.5-tonne, large van segment, primarily due to persistent challenges related to cost, range and payload capacity – thus leaving these proven pollutants on the road. Addressing this imbalance requires targeted interventions aimed at overcoming barriers specific to heavier eLCVs.

The potential for a significant hurdle in fleet industry decarbonisation looms large, as highlighted by recent warnings from the British Vehicle Rental and Leasing Association (BVRLA) on its leading Zero Emission Van Plan.   

Government intervention is crucial to accelerating the transition towards sustainable transportation.

The Budget presents a prime opportunity to realign the logistics industry with the correct infrastructure and grant commitments, ensuring resilience and avoiding potential setbacks.

To ignite momentum, policymakers must prioritise initiatives addressing these challenges head-on.

Tailored subsidies, tax breaks, and grants can bridge the affordability gap and spur demand in this segment, such as introducing a version of the Plug-in Van and Truck Grant (PIVG) for used vans alongside the existing OZEV PIVG for brand-new vans. 

Additionally, fostering innovation in EV technology and vehicle design specifically for LCVs is paramount to enhancing competitiveness.

Collaborative efforts between government agencies, industry stakeholders, and research institutions can drive advancements in critical areas such as lightweight materials, efficient drivetrains including in-wheel motors, and scalable battery solutions – this would further accelerate the development and uptake of solutions that can reduce emissions now and offer superior performance, efficiency and affordability.

Despite the benefits, there’s growing apprehension and confusion about when and how to transition from the internal combustion engine van to an all-electric one.

From regulatory changes to cost increases and even changing consumer habits, it has a knock-on effect for businesses and fleet manager confidence.

Large manufacturers such as BYD and Mercedes-Benz are changing their targets, switching from 100% EV in 2030 to including hybrids in that mix. By having hybrids in their targets, these companies signal a pragmatic recognition of the challenges inherent in full electrification.

While this move may raise concerns about wavering sustainability goals, it also highlights the need for solution flexibility in navigating the complexities of transitioning an entire industry toward electrification.

We know the future is electric but options for the short term are also needed, to bridge the gap from the internal combustion engine to pure electric.

Therefore, in this context, the UK Government needs to look at the way it values range extenders, hybrids and retrofit solutions, especially in the fleet industry, where this technology makes a lot of sense in the short and long term in the transition to pure EV.

However, in the current regime, taxes are still high, and incentives aren’t readily available for these solutions.

The impending UK Budget offers a pivotal opportunity to recalibrate incentives for eLCVs, acknowledging the challenges posed by the slowing adoption of EVs and the scarcity of heavier eLCVs.

By aligning incentives with real-world products and prioritising investments in infrastructure and innovation, the UK can lead the global charge in electrifying light commercial vehicles while advancing broader sustainability goals.