In today’s Spring Statement, Chancellor Rachel Reeves introduced several measures affecting UK fleets. Here we gauge the industry reaction…

In today’s Spring Statement, Chancellor Rachel Reeves introduced several measures affecting UK fleets.

Starting April 2025, the standard annual Vehicle Excise Duty (VED) rate will increase from £190 to £195. In addition, newly registered EVs will face first-year VED rates of £10, which marks a change from the previous exemption. Furthermore, the £425 annual surcharge for vehicles costing over £40,000, including many EVs, remains in place. Industry leaders have called for increasing this threshold to £60,000 to better reflect current market prices.

According to the BVRLA, the UK Government missed an early opportunity to give the transition to zero-emission vehicles some welcome support, failing to reference the impending electric vehicle tax hikes or its recent ZEV Mandate consultation in today’s Spring Statement. Responding to the Chancellor’s address, the BVRLA has reiterated the need for bold action to meet bold decarbonisation targets.

BVRLA chief executive, Toby Poston, said: “Electric vehicle registrations have never been higher, but the fleet and mobility services sector’s confidence in a fast, fair and affordable net zero transition is wobbling. Today’s Spring Statement failed to acknowledge or address the uncertainty and lack of confidence surrounding the electric vehicle market.

“Our current decarbonisation targets are at major risk unless policymakers deliver a comprehensive set of measures to drive long-term demand. The clock is ticking, and next week’s VED hikes will see that pressure building.”

Vicky Edmonds, CEO of EVA England, commented: “Encouraging to see mention of the Planning and Infrastructure Bill as a key motivator for growth – this is a crucial opportunity to address planning barriers electric vehicle charging infrastructure and we hope the Government uses it to make it easier for all drivers to access charging solutions.

“But this statement was also an opportunity to address prevailing cost barriers preventing the everyday driver from switching to electric. Increasing the expensive car tax threshold for EVs should have been a priority while they remain on average more expensive than their petrol and diesel counterparts. We hope EVs as a key sector for growth will be at the forefront of the Chancellor’s priorities in the forthcoming Spending Review.”

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), commented on the measures announced today: “The Chancellor’s statement provided no update on some of the issues affecting the automotive retail industry.”

“The Spring Statement did not provide an update on the electrification of the UK car parc. This transition provides a huge economic opportunity for the UK and the Government needs to be incentivising consumers to purchase a new vehicle, which will drive growth in the UK economy. Overall, there were missed opportunities in today’s announcement to use the automotive sector to stimulate growth in the UK.”

David Bushnell, director of consultancy and strategy, Fleet Operations, said: “The Spring Statement marks another missed opportunity to provide the leadership and clarity the fleet sector urgently needs. It offers little in the way of the consistent, long-term support needed to give businesses the confidence to invest and to accelerate fleet decarbonisation.

“We recognise the challenges facing the UK’s public finances, including commitments to increase capital and defence spending. But this must be balanced with policies that help the fleet industry invest, grow and lead the transition to zero-emission transport.

“The Department for Transport’s recent extension of the Plug-in Van Grant, announced in February as part of a £120 million funding package, was a welcome move — but it’s hard to see this as anything more than a sticking plaster without broader, joined-up policy. At the same time, the withdrawal of the VED exemption for electric vans from April 2025 – aligning them with petrol and diesel models – sends a mixed and unhelpful message to operators who have already committed to cleaner transport.”

Ian Hughes, CEO of Zenith’s Corporate and Consumer divisions, added: “Today’s Forecast provided a welcomed period of stability, with no news being good news. With the previously announced vehicle excise duty increase for EVs and the expensive car supplement due to come into effect on 1 April, drivers will be relieved no further tax changes were announced today. We look forward to hearing the results of the most recent zero emission transition consultation as the Government acts on industry insight to further support the transition.”