Finance (No.2) Bill

Written evidence submitted by LEVC (FB02)

ABOUT LEVC

1. LEVC (formerly LTC) manufactures the world’s only purpose-built, mass-market range extended electric taxi. The electric taxi draws on decades of automotive heritage, having built the iconic London taxi in Coventry for almost 70 years.

2. LEVC’s electric taxi is manufactured at a new facility at Ansty, near Coventry, purpose-built with a £325m investment by LEVC’s parent company Geely. Ansty is the first new car plant to be built in the UK in over 10 years, the only car plant in the UK dedicated to electric vehicles (EVs) and will also house Geely’s global research and development (R&D) hub for EV technology, exporting innovation worldwide.

3. The company recently relaunched as LEVC (London EV Company), marking the next stage in the company’s transformation. LEVC has the ambition to be the urban commercial vehicle provider of choice for cities around the world.

4. LEVC’s taxi is built on an adaptable platform which will pave the way for it to manufacture other electric commercial vehicles following the taxi’s UK launch. The electric taxi will also be sold in cities across Europe and beyond, meeting the global demand for safe, clean, accessible taxis and demonstrating UK leadership and advantage in the commercial vehicle segment.

ABOUT THE NEW ELECTRIC TAXI

5. LEVC’s electric taxi is called TX. TX uses eCity technology which combines a small petrol generator (known as a range-extender) with a class leading battery and proven electric powertrain. eCity technology gives drivers a zero emissions range of more than 80 miles on pure electric, and a combined range of over 400 miles with its small petrol generator.

6. TX is purpose-built and designed as a taxi from the ground up. It is not a van which has been converted for use as a taxi. As such it provides the optimal driver and passenger experience along with the iconic design heritage associated with the famous London Black Cab. It has a 25ft turning circle to handle urban streets with ease.

7. TX is instantly recognisable and easy to identify as genuine and therefore a safe licensed taxi. It is a high-quality, modern vehicle, reflecting the image of the UK cities where it operates. It is reliable, dependable and has a long lifespan of 15 years, reducing end of life waste and rate of replacement.

8. The cab also retains its renowned accessibility features. It has a new retractable integrated ramp making it quicker and easier for passengers in wheelchairs to travel in a forward facing position. Other accessibility features include induction loops for hearing aids a well as contrasting grab handles and seat edges for the partially sighted. The passenger cabin carries 6 rather than 5 passengers.

EXECUTIVE SUMMARY

9. LEVC welcomes the opportunity to submit written evidence to the Finance (No. 2) Public Bill Committ ee which will implement the tax measures contained in the Autumn Budget.

10. Autumn Budget 2017 set out much needed changes to Vehicle Excise Duty (VED) rates, specifically the announcement that zero emission capable (ZEC) taxis will be exempt from the VED supplement f rom 1 April 2019 which will help to incentivise taxi drivers to go electric in the long-term .

11. However, at this crucial time in the transition to green taxi fleet s and improved air quality across the country , the April 2019 timeframe seriously risks discouraging drivers in the short-term as they will be required to pay the standard rate for the full five years , adding thousands to the lifetime cost of one of the cleanest com mercial vehicles on the market and the only electric taxi currently in production.

12. Please find a detailed overview of LEVC’s position on this key issue below.

Immediate exemption from VED supplement for ZEC taxis

13. LEVC is a direct beneficiary of successive governments’ investment in the development, production and sale of commercial EVs in the UK. The reason successive governments’ EV policy package has been so successful in growing the production, sale and use of electric vehicles since 2010 has been its cohesion across government departments.

14. Largely due to the work of the Office for Low Emission Vehicles (OLEV), the UK EV sector has benefited from a policy package where financial subsidies such as the Plug-In Car, Van and Taxi Grants, non-financial promotional activities such as Go Ultra Low and HM Treasury’s vehicle taxation regime offered the best possible deal for EV drivers.

15. Although LEVC’s ZEC taxi is a commercial vehicle built for business use, it is classified as a passenger car (category M1) because it is built to carry passengers. It is therefore subject to the VED standard rate of £140 and supplement of £310 for passenger cars priced over £40,000.

16. We have created a competitive finance deal which means that drivers buying the electric taxi will be better off than in a diesel equivalent, but the VED increase directly undermines the driver benefits of buying an electric taxi.

17. LEVC welcomes the announcement in Autumn Budget 2017 to remove ZEC taxis from the VED standard rate supplement bracket from April 2019. While this will help to incentivise taxi drivers to go electric in the long-term, it seriously risks discouraging cabbies in the short-term as they will be required to pay the standard rate for the full five years.

18. We would therefore urge the Public Bill Committee to amend the Finance (No. 2) Bill to bring the VED supplement rate change forward by one year from 1 April 2019 to 1 April 2018 in order to reward early adopters for making the electric switch, contributing to reduced emissions and improved air quality nationwide.

December 2017