daniel tuz finance analyst pvs group
Daniel Tuz Finance Analyst PVS Group
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NOW might be the time to think about van renewal schedules ahead of application later this year of the WLTP protocol on all light commercial vehicles.

PVS Group has published a new white paper, ‘PVS Talks…WLTP Type Approval for LCVs’, to provide fleet decision-makers with insight into how WLTP and the related Real Driving Emissions (RDE) test procedure will impact on van CO2 emissions.

The paper, written by Daniel Tuz, PVS Group finance analyst, reminds fleet operators that they will also have to cope with a new Vehicle Excise Duty regime for vans from April 2021 – delayed from April 2020  – with the Government indicating that First Year Rates for high emission models could reach £2,000.

Additionally, van fleet operators are having to grapple with implementation of Clean Air Zones (CAZ) in towns and cities nationwide starting with the Ultra Low Emission Zone (ULEZ) in London which is effective from April 8.

Van emission entry criteria to escape a daily charge for the central London ULEZ is Euro 6 for diesel vans and Euro 4 for petrol models. Other conurbations planning to introduce a CAZ are setting similar standards.

The impact of the introduction of WLTP on vehicle carbon dioxide (CO2) emissions and MPG data has been described by some industry experts as having a “seismic” impact on the motor industry. The regime for vans has been phased in as follows:

  • Lighter van models (Class I up to 1305kgs) requiring type approval have been tested under WLTP rules since September 2017
  • All lighter vans (Class I up to 1305kgs) have been tested under WLTP rules since September 2018
  • New types of heavier vans (N1 Class II 1305-1760kgs and III above 1760kgs) have been tested under WLTP rules since September 2018
  • All heavier vans (N1 Class II 1305-1760kgs and III above 1760kgs) must be tested under WLTP rules from September 2019.

That means from September 2019 all new vans must be WLTP type approved. However, while testing under WLTP protocols for cars has resulted in some models being axed or temporarily withdrawn from line-ups and lengthy delays in vehicles being delivered, PVS does not anticipate similar problems with vans.

The report says: “Manufacturers appear to have seized the moment and are proactively seeking to avoid repeating, what could be considered by some, an uninspired and lacklustre performance for car WLTP type approval.”

Highlighting that among leading van manufacturers, Volkswagen has developed its own testing facilities to alleviate production bottlenecks and other issues and the PSA stable, which includes Citroen, Peugeot and Vauxhall, was working through its mid and large LCV ranges.

The Government is continuing to promote its ‘green’ agenda by remodelling van Vehicle Excise Duty. It ntends to replace the current flat rate (2019/20: £260 a year/£140 for early Euro 4 and Euro 5 compliant vans/60% of the main charge for zero emission vans) with, from April 2021, a two-category approach, graduated by CO2 when the van is first registered, followed by a standard rate for subsequent years.

While continuing to work out exact details of the new regime, indications are:

  • The new system will take account of van weight with a two-category approach each sub-divided into CO2 bands
  • Ongoing incentives will be provided in the first year and beyond for new zero emission, ultra-low emission and other alternatively fuelled vans.

The exact weight categories, CO2 bandings and new Vehicle Excise Duty rates will be announced by the Government prior to April 2021 implementation.

However, the Government has already indicated in its two-category approach that high emission vans will be heavily penalised compared with today’s Vehicle Excise Duty rates.

For example, small/medium sized vans with emissions of more than 225g/km could face a first year Vehicle Excise Duty charge of £2,000 and those with CO2 emissions of 191-225g/km a £1,500 charge. Large vans with emissions above 255g/km could face a charge of £500 and those with CO2 emissions of 221-255g/km a £390 charge. In all cases a standard flat Vehicle Excise Duty rate is proposed for vans in the second year of operation and beyond.

Meanwhile, zero CO2 emission vans of all weight categories are likely to be £0 Vehicle Excise Duty rated, according to Government indications, and those with CO2 emissions of 1-50g/km could face a £10 first year rate, but a £125 standard rate compared with a £265 standard rate for higher emitting models.

With low CO2 emission vehicles being “rewarded” and those with high CO2 emissions “penalised”, the report concludes: “It is clear to see that when these changes are implemented users of electric and hybrid vans will fare better.”

 

 

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