Automotive Business Magazine – Q2 2026 – Digital edition - Magazine - Page 65
FEATURE
INDUSTRY OUTLOOK
EY UK and Ireland, agrees that “offering
compelling price and cost propositions
in relation to EVs will continue to be a
priority for automakers and retailers.”
This tax change necessitates that
fleet operators consider how it is going
to impact their operations, which will
include stress-testing against future
usage-based costs.
Oliver Holt, sales manager (UK
and Ireland) at Geotab explains:
“Telematics, mileage forecasting and
route optimisation will become boardlevel tools rather than operational
nice-to-haves.”
Fleets must have systems in place to
monitor mileage data, which can then
contribute to understanding the total cost
of ownership.
There will be some fleets that accept
the new mileage tax and budget
accordingly. However, Holt feels that
some will “respond defensively” by
reducing utilisation or not making the
transition to electric until the Government
consultation has provided more clarity.
He adds: “Others will push harder
on efficiency, investing in smarter
routing, charging strategies, and depot
optimisation to protect margins. Either
way, the tax will shape behaviour well
before it is formally introduced.”
Of course, changes to the payper-mile tax are not the only Budget
items impacting the market in 2026.
Reeves also introduced additional
spending for EV charging and an
increase in the expensive car threshold
for EVs. Bengtsson says that the
additional support and funding could
counterbalance the impact of the payper-mile tax.
She adds: “It’s also worth remembering
that the rate of tax per-mile for EV
drivers will remain significantly lower
than the effective rate for petrol and
diesel drivers.”
Transition to electrification
The conversation around making the
UK’s car parc fully electric, with the ZEV
Mandate approaching and a sharp rise
in the production of EVs, permeates
the industry.
In January 2025, 139,345 electrified
vehicles were registered, compared with
144,127 in January 2026, a 3.4% increase,
according to the Society of Motor
Manufacturers and Traders (SMMT).
The ZEV Mandate target is rising to 33%
in 2026, which Bengtsson says represents
"a particularly significant challenge for
automakers, given BEV market share was
only 23.4% in 2025.” →
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