Automotive Business Magazine – Q2 2026 – Digital edition - Magazine - Page 64
FEAT U R E
INDUSTRY OUTLOOK
Eyes on the road
Milly Standing gets a handle on the 2026 industry outlook
T
he automotive industry has
thrown itself into 2026, with
dust still settling from the
Autumn Budget and fastapproaching Zero Emission
Vehicle (ZEV) Mandates. From
new entrant OEMs to the
onward march of technology,
change is the only constant
for the year ahead.
No wonder, then, that there are so
many diverse opinions on where the
sector is heading. Fleet, retail, workshop,
and production face many similar
challenges, in addition to their own
unique hurdles.
Milestones on the horizon include an
increase in artificial intelligence (AI)
and automation, the fight for charging
infrastructure to keep pace with electric
vehicles (EVs), changing perceptions
around used EVs, aftersales skills gaps,
and margin compression. Meanwhile,
as conflict builds on the global stage, all
eyes will be on the horizon.
Pay-per-mile impact
When Chancellor Rachel Reeves
introduced the pay-per-mile tax for
EVs in her Autumn Budget, the industry
was divided. Some thought it made
perfect sense and was inevitable, as the
Government would have to make up for
lost road tax somehow.
Others, however, believed it to be a
step in the wrong direction, and one that
was not only going to deter drivers from
transitioning to electric, but could even
undo all the positives so far achieved by
the Electric Car Grant.
Whether or not they agree with its
introduction, the tax will come into
force in April 2028, and businesses must
consider their plan of action now, to
ensure they are ahead of the changes.
Some, however, see the wide gap as a
reason to delay action.
Peter Golding, founder and CEO at
FleetCheck, says: “We are not aware
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of any fleets preparing for this yet.
Firstly, it’s some time into the future,
and secondly, most of our user base
appear to think the arguments against
the scheme in its current format are
convincing, and the Government will be
forced into a rethink, probably as part of
the consultation process this year.”
The companies that are preparing early
should review the impact on total cost of
ownership (TCO) to help them adjust their
pricing and leasing strategies.
Jon Evans, head of market UK and
Ireland at Monta, says: “They should also
develop tools and guidance to make it
easier for customers to understand the
new charges, and the impact this will
have on their own EV ownership costs.
“In the vast majority of cases, the cost
of owning an EV versus an ICE vehicle
will remain lower.”
There is also an opportunity for
companies to adjust their product
offerings to package the additional tax.
Evans believes that companies should
invest in better tracking and reporting
systems to ensure accuracy.
Indeed, the proposal of inputting yearly
milage and making a payment has been
viewed as hard to implement in terms of
mileage verification.
Paul Hollick, chair of the AFP, believes
that some factors of the tax will change
after the Government consultation, which
many industry leaders and associations
want to see brought forward to early
2026 instead of 2027.
Martijn Versteegen, CEO at IMAGIN.
studio, says: “Research suggests that
more than half of road users would be
deterred from making the switch to an
EV if the new rules are implemented,
indicating that the tax could slow the
shift toward more affordable EVs.”
He adds that retailers and finance
providers must consider this, as there
should be greater transparency on
mileage-based modelling.
Maria Bengtsson, mobility leader at
