A Motorcycle Safety and Transport Policy Framework
Electric and low emission powered two wheelers (ePTWs) have traditionally not received much in the way of government incentive in the United Kingdom. As a result, the UK is not a well-established market for electric motorcycle manufacturers and new registrations of road going machines have been slow, despite the obvious economic advantages of ownership such as lower overall ownership costs. Feedback from some manufacturers and owners indicates that motorcycles have better fuel consumption than cars and therefore internal combustion engined motorcycles and scooters should have lower CO2 emissions. Yet there are no taxation incentives for purchasing lower emission motorcycles.
In the car sector, it is acknowledged that electric cars have a market disadvantage and the government compensates for this with the Plug-In Car Grant and support for charging infrastructure. Car owners also benefit from lower vehicle excise duty or even VED exemption on an increasing number of models.
In the case of electrically propelled cars, a clear benefit is the production of no emissions at the point of use which will assist with urban air-quality. It however will do nothing to reduce congestion or wear on the roads. In fact in offering the incentive for EV use in urban centres (eg. Central London Charging Zone) congestion may again return to previous levels. Electric motorcycles offer a solution to both issues.
A Plug in Grant for electric motorcycles was an explicit target of this framework and we are delighted that this was announced by Ministers in autumn 2016. Actions in this area will improve public health by increasing the uptake of cleaner vehicles and will improve mobility.
Cars registered after March 2001 have annual taxation (Vehicle Excise Duty) based on their carbon dioxide output per km. This was intended to reduce the CO2 pollution by cars by encouraging owners to purchase lower emission cars. As of 2014, cars with a CO2 emissions figure of less than 101g/km pay no annual taxation. On top of this, since 2010, cars with CO2 outputs of less than 131g/km pay nothing in their first year.
Conversely, motorcycles and tricycles pay the same annual taxation based on engine size and not on CO2 output. There is no exemption for any size of combustion engine. The annual tax for a motorcycle starts at £17 for an engine under 151cc and up to £82 for an engine over 600cc. Only battery electric motorcycles are exempt from VED (as are battery electric cars).
From 2017, the structure of VED will change for cars. There will be higher road tax prices for all new cars in their first year, but a lower fixed annual rate of £140 for all cars applying for road tax renewal thereafter. That means after the first year, road tax rates will no longer be based on a car’s CO2 emissions. Also under the new road tax UK rules, zero-emissions vehicles will be exempt, whereas cars costing more than £40,000 will have to pay a £310 supplement.
Under this new system, it makes sense to retain the current motorcycle VED structure, as a ‘flat’ system would disproportionately affect smaller and cleaner motorcycles. However, given the very low polluting characteristics of the sub 250cc end of the market, it would make sense for these bikes to be VED exempt.
Although it is shown by DfT modelling that cars produce a significant percentage of the overall CO2 emissions from road transport, it makes little sense to only incentivise more efficient cars rather than more efficient modes of transport such as motorcycles. Not everyone will want to switch from cars to motorcycles, but making it financially less onerous for car owners to do so makes good sense.
Battery electric and hybrid cars are entitled to up to £5,000 or 25% off their purchase price via the Plug-In Car Grant. This scheme has been in operation since 2011 and has helped over 11,000 battery-electric and plug-in hybrid cars get out of showrooms and on to the road starting from an annual market of virtually zero in 2010. During that time, annual new electric motorcycle registrations have declined significantly from 541 in 2010 to 113 in 2013. Clearly, such an incentive scheme works for cars and we would have no doubts that such a scheme would be beneficial to the uptake of battery electric and hybrid motorcycles. We are therefore delighted that the Government has announced a Plug in Grant for electric motorcycles.
Due to production lead times, capital availability and supply chain issues, there are a limited stock of quality battery electric vehicles in the world market. Hopefully, this will increase over time, but if the UK wants to drive an increased uptake of zero emission motorcycles, we need to make the UK more attractive to businesses wanting to enter the market. The lack of UK government support has previously been cited by premium manufacturers as a reason to concentrate their efforts elsewhere. Many EU member states offer subsidies and tax breaks for electric vehicles which include motorcycles and this makes them a more attractive market to operate in. The UK needs to offer incentives to ensure a level playing field not just between modes of travel in the UK, but to end the effective competitive advantage that other markets have.
This would improve motorcycle fleet emissions in both terms of CO2 and other pollutants. In turn, this would also improve local air quality as well as help the UK meet its targets in reducing CO2 emissions.
- MCIA will continue dialogue with government to create better consumer incentives for the purchase of electric motorcycles, possibly through inclusion in the Plug In Car grant which has now been extended to vans. This would stimulate the electric motorcycle market.
- MCIA will also open discussions with the DfT and Treasury with regards to including new types of mopeds into the car VED bands with a view to extending this to all new motorcycle types from 2017.
UPDATE – Action 27 – To Establish Incentives for Ultra Low Emission Motorcycles
Government opened registrations for a Plug in Grant for electric motorcycles in the new Euro IV category
We have made our views known to Government on VED and seek further discussions with The Treasury (initial discussions were held in 2014).