Ahead of the highly anticipated 2024 general election, the National Franchised Dealer Association (NFDA) has unveiled a set of seven bold proposals that could potentially reshape the electoral landscape.
Here are the 7 key asks by NFDA:
1. NFDA Calls for Price Incentives for Electric Vehicles (EVs)
According to the NFDA Consumer Attitude Survey 2023, a staggering 62% of UK driving license holders cited price as the main barrier to purchasing an electric vehicle. This highlights the urgent need for financial incentives to encourage mainstream EV adoption.
To address this issue, the NFDA is proposing a three-pronged approach:
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Reintroduce Upfront Price Incentives: Offering upfront price incentives for EVs could re-stimulate adoption and help transition the market from early adopters to the mainstream.
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Harmonise VAT on EV Charging: Reducing the VAT on Public EV charging to 5%, aligning it with private charging, would make EVs more affordable for consumers.
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Extend Vehicle Excise Duty (VED) Exemption: Prolonging the VED exemption on EVs until 2026/27 would provide a temporary financial relief for EV owners.
Additionally, the NFDA emphasises the need for the government to address the misinformation surrounding EVs in the media, which may be contributing to consumer hesitancy. Is the UK ready to go electric? Click here find out.
2. Overhaul the Apprenticeship Levy
The UK automotive retail industry faces a severe skills shortage, with the highest vacancy rate in 21 years recorded in 2023. However, the Apprenticeship Levy, introduced in 2017 to address this issue, has failed to deliver. Apprenticeship starts have dropped by 32% since the levy's implementation, and businesses have lost over £4.4 billion in unspent levy funds due to the 'use it or lose it' claw-back rule. Moreover, the transition towards (EVs) has exacerbated the skills gap, with an estimated shortfall of 30,000 EV-qualified technicians by 2035. To address these challenges, the NFDA is calling for a complete reform of the Apprenticeship Levy. Key proposals include removing or extending the claw-back cap, ring-fencing 50% of the funding solely for apprenticeships, and allowing access to a wider range of training courses to meet the industry's evolving needs.
3. Mandated Annual ChargePoint Targets Needed
The previous government's target was to have 300,000 public EV charge points installed across the UK by 2030. However, as of May 2024, there were only 61,056 public chargers, highlighting the significant gap. To meet the target the UK would need to install at least 40,000 new public chargers every year until 2030. The government had planned to leave most of this infrastructure buildout to the private sector. Under the NFDA's proposal, local authorities would be responsible for providing more publicly accessible on-street charge points, with the national government providing necessary funding to enable this expansion.
4. A Fair and Balanced Road Pricing Plan
The NFDA proposes exploring the feasibility of a road usage tax levied on a per-mile basis, regardless of the vehicle's powertrain technology. This would mean:
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Replace Fuel Duty and VED: The proposed road usage tax would replace the existing fuel duty and Vehicle Excise Duty (VED) systems, which are becoming increasingly obsolete with the transition to EVs.
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Per-Mile Taxation: Vehicles would be taxed based on the distance travelled, with a fixed rate per mile driven. This ensures a fair and equitable system, where all motorists contribute proportionally to their road usage.
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Technology-Neutral: The road usage tax would apply to all vehicles, regardless of their powertrain technology (petrol, diesel, EV, hybrid, etc.), ensuring a level playing field and avoiding potential disincentives for EV adoption.
5. Remove unfair regulations for heavier, electric vans
The NFDA is calling for the removal of red tape around the ownership and operation of 4.25-tonne electric vans (E-vans) to promote their adoption. Currently, two key regulations unfairly disadvantage these heavier E-vans compared to their 3.5-tonne internal combustion engine (ICE) counterparts:
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Earlier MOT Requirements: 4.25t E-vans must undergo HGV MOTs from just 1 year after registration, while 3.5t ICE vans can wait 3 years. This adds burden, expense, and downtime.
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EU Drivers' Hours Rules: If a 4.25t E-van travels beyond 62 miles from base, EU drivers' hours rules apply, requiring tachograph installation. This 62-mile limit hinders operations.
To level the playing field, the NFDA proposes aligning the regulations by:
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Allowing 4.25t E-vans to follow the same 3-year MOT schedule as 3.5t ICE vans.
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Exempting 4.25t E-vans from EU drivers' hours rules, aligning with 3.5t ICE vans. These changes would remove unfair barriers and provide fleet operators with the flexibility to transition to zero-emission E-vans without additional burdens or operational limitations.
6. Delegated Testing to Boost HGV Testing Capacity
The current system for HGV annual safety testing in the UK faces several challenges:
• 98% of HGV tests are conducted at Authorised Testing Facilities (ATFs) by DVSA staff testers, constraining overall testing capacity.
• The public-sector testing schedule is misaligned with the 24/7 operations of the logistics and haulage industry.
• Thousands of HGV tests are cancelled or delayed monthly, keeping vehicles off the roads and hampering supply chain efficiencies.
What is Delegated Testing?
Delegated testing involves allowing IRTEC (Institute of Road Transport Engineers Commercial) certified testers employed by the private sector to perform annual HGV tests.
Benefits of Delegated Testing
• Increased Testing Capacity: Private-sector testers would significantly boost the overall HGV testing capacity across the UK.
• Improved Efficiency: Private testers can offer round-the-clock testing, better aligning with industry patterns and reducing delays.
• Maintained Quality:ATF pre-inspection technicians are already independently licensed through the rigorous IRTEC scheme, ensuring testing quality would not diminish.
• Reduced Downtime: With increased capacity and flexibility, HGV operators would experience less downtime waiting for test appointments.
7. Reducing the Burden of Business Rates
The NFDA's 2024 outlook survey revealed that business rates are the top priority dealerships want the next government to address. This long-standing issue has been overlooked, despite the Conservative Party's 2019 manifesto pledge to reduce business rates for retail businesses.
The NFDA urges the next government to take decisive action:
Reduce the Uniform Business Rates back below 50p, reversing the April 2024 increase to 54.6p.
The NFDA argues that reducing business rates is crucial to support brick-and-mortar businesses, especially automotive retailers, as they navigate the ongoing shift towards online commerce and digital transformation.
By lowering the business rates burden, the next government can provide much-needed relief to the automotive retail sector, fostering a more equitable tax environment and enabling businesses to invest in their operations and workforce during this period of transition.
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