As Volkswagen continues its electric car offensive, a VW boss claims the tipping point for electric cars – cost parity with ICE cars – is very close.
It’s not exactly a closely guarded secret that Volkswagen is on a mission to convince us it’s a clean, green fluffy-bunny car maker, throwing its considerable expertise (and cash) at turning itself in to the world’s biggest maker of electric cars.
The push to become a maker of electric cars is driven by the Dieslegate fiasco and a need to distance itself from the now demonised diesel, and a need to slash its average CO2 emissions to avoid punitive fines from legislators.
So it’s no real surprise to find a VW boss, VP Reinhard Fischer, telling Automotive News that the ‘tipping point’ for electric cars is very close, with the economies of scale of VW’s EV production plans driving down EV prices to parity with ICE cars. And he may be right.
That price parity, says Fischer, will drive new customers to BEVs – not just early adopters – because an EV is the better choice and will cost half as much to run as an ICE car. So it will be a no-brainer. Again, he is probably right. For now.
The trouble is, despite Fischer’s assertions, that even with EVs getting cheaper, range anxiety all but disappearing, and charging infrastructure growing (particularly rapid charging), electric cars aren’t going to stay cheap to run for long.
That’s because as soon as EVs start to be sold in any sort of significant numbers they will start to be taxed in the same way as ICE cars.
At the moment, EV’s are subsidised at the point of purchase, and their fuel – electricity – is taxed at a rate of just 5 per cent for domestic use (although businesses pay 20 per cent), whereas for diesel and petrol getting on for two thirds of the price you pay is tax of one kind or another.
That raises getting on for £30 billion a year in the UK just on fuel duty, with VAT and VED probably another £10 billion on top of that. That will have to be replaced by taxing EVs.
And the only way to do that is black box road charging. Which will arrive sooner than you think, so make the most of it while you can. But if you do, make sure you lease an EV – don’t buy one.