- Robert Forrester warns chancellor of ECOS risk
- VW and Cupra added to Electric Car Grant
- Warning over text message car finance scams
- Bailiff firm refunds after overcharging
- WEEK AHEAD: CPI and RPI
- Poor public sector productivity hitting UK economy
- Admiral sets aside cash for car claims redress
- GAC takes over distributor in Australia
- CarGurus closes CarOffer
- OPINION: The eco mysteries of the Electric Car Grant
Robert Forrester warns chancellor of ECOS risk
Robert Forrester has written to chancellor Rachel Reeves warning her that plans to scrap employee car ownership schemes (ECOS) could hit vehicle sales and production in the UK.
His letter appealing against the scrapping of ECOS argues that such sales make up 5% of new car registrations and underpin “a large share of the nearly new market”. Changing the taxation of such schemes could mean manufacturers will simply not build those cars.
“We are very confident your proposed policy will mean current ECOS volume will not be produced and sold on in other channels,” The Sunday Times reports he said.
Ironically, added Forrester, the change would also cost the Treasury more than its saves. Vertu studied the tax paid by 250 workers on its own scheme; it concluded that removing the tax benefit would end up costing the Treasury £7m on this group alone.
This would be through the loss of VAT and vehicle excise duty on ECOS cars, which typically involve higher-value vehicles. In the case of Vertu, “aggregate exchequer income is reduced from £32,500 a year to £4,505 for each employee.”
The Treasury forecast the ECOS changes would net £275m in the first year of the scheme. It has estimated there are around 100,000 ECOS cars in the UK.
Forrester has urged the Treasury to reconsider the changes, which have already been delayed from April 2026 to October 2026.
It did not respond to a request for comment.
VW and Cupra added to Electric Car Grant
Volkswagen, the UK’s best-selling car brand, has finally been added to the Electric Car Grant eligibility list. The ID.3 has qualified for a £1,500 discount; eight models are eligible, including the £29,360 Pure Essential model.
Although it is built in VW’s EV-only Zwickau plant in Germany, which is fully carbon-neutral, the ID.3 doesn’t qualify for the full £3,750 grant. This is despite its batteries also primarily being produced in Europe. Auto Sunday has asked Volkswagen UK for comment.
The closely-related Cupra Born has also qualified for the Level 2 £1,500 grant.
Warning over text message car finance scams
As well as cold-calling people, fraudsters are also now texting people with their car model and registration, telling them the need to follow a link and complete a registration. One message shared online told a driver they were entitled to a payout of up to £16,000.
The FCA is advising people not to share any information and report scam texts to Ofcom by forwarding them to ‘7726’ (which spells ‘SPAM’ on an alphanumeric keyboard).
Bailiff firm refunds after overcharging
Marston Holdings, Britain’s biggest bailiff company, has been forced to launch a refunds programme after overcharging people it was pursuing for unpaid debts. The Guardian reports Marston Holdings is used by companies and state-funded bodies including Transport for London to recover debts and fines.
Its behaviour has been called “unacceptable” and the company has apologised after overcharging “enforcement fees” related to unpaid road traffic penalties. When a bailiff visits someone’s home in England and Wales, a fixed £235 fee is added to the debt; sources say Marston may have added multiple enforcement fees to some debts.
WEEK AHEAD
Wednesday, CPI and RPI
Thursday, public sector net borrowing
Friday, retail sales
DATA INSIGHT
Poor public sector productivity hitting UK economy
£80bn: An EY report claims poor productivity in the NHS and other public services is costing the UK economy £80bn a year, says The Times. The productivity gap between public and private sector has widened since 2019; it has fallen 5% in the public sector, while growing 3% in the private sector.
Admiral sets aside cash for car claims redress
£50m: The amount insurer Admiral has set aside to compensate customers who were not given a fair settlement when claiming for stolen or written-off cars. It is the first insurer to go public with the cost of its redress plan; The Times reports the FCA is looking at 12 insurers following the launch of an investigation in March 2024.
GLOBAL AUTO
GAC takes over distributor in Australia
Chinese brand GAC has cancelled a deal to distribute cars in Australia through local importer AGA Auto. It will instead establish its own operations. GAC is the second Chinese brand to take over Australian distribution following BYD’s June takeover from local company EVDirect.
CarGurus closes CarOffer
CarGurus is closing CarOffer, 18 months after acquiring the Texas-based wholesaler. CarGurus, the leading US autos site by traffic, has invested at least $215m in CarOffer over the past two years. Quarterly revenue more than trebled during the pandemic used car shortage, but has “flopped” as production picked up. CarOffer has posted three straight years of net losses.
OPINION
The eco mysteries of the Electric Car Grant
With great fanfare, the government’s Electric Car Grant promised discounts of up to £3,750 on the greenest and most eco-friendly new electric cars priced at £37k or less. Yet, weeks into the scheme, we still don’t have a model that actually qualifies for the full amount.
This is starting to look more than a little odd.
The environmental aspect is, on the face of it, reasonable. The government wants to discourage EVs made in countries with “poor sustainability records or high carbon emissions”. China reportedly has almost 1,200 coal-fired power stations, more than four times the number of the next-highest country, India. Add in shipping and it can be debated just how green such EVs really are.
So don’t expect to see Chinese-built BYDs, Omodas, Jaecoos et al on the official list. Not to mention Chinese-built electric Volvos, Smarts and Minis. Incidentally, how frustrated must BMW bosses now be with the decision to pause making electric Minis at Plant Oxford…
But, it seems, making cars closer to home doesn’t necessarily count as green to the government, either. Take the Volkswagen ID.3, added this weekend – the Zwickau plant in Germany is famously carbon-neutral, and the batteries are assembled in Europe too. Or, take the new Renault 5, made in France, with the firm making concerted efforts to use a local supplier base. Both get a £1,500 grant, not the full £3,750.
Maybe Europe is deemed still too far away? Okay then, what about the Stellantis EVs made in Ellesmere Port? The Vauxhall Combo Electric, Peugeot e-Partner, the Citroen e-Berlingo? Despite being made in the UK’s only fully EV production facility, which also houses an on-site battery assembly shop, they all receive only the £1,500 Level 2 grant.
In this month’s Auto Market Insight, we looked in detail at science-based targets, the possession of which serve as a qualifier for ECG eligibility. But it’s the second eco element, related to car and battery production, that’s the mystery.
Apparently, the location of the vehicle production is weighted at 30% in the calculation, with battery production at 70%. Is this is why Europe- and UK-based models don’t qualify for the full amount? The car production may be green but if batteries still come from China, they are disqualified from the full saving?
Sadly, it’s all far from clear. Indeed, some are now wondering if any car will qualify for the full amount. Or, whether it will be any car other than the new Nissan Leaf, with a battery production plant right next door to the Sunderland factory – thus handing Nissan a formidable competitive advantage over rivals?
At least the grant will last much longer if the majority of qualified cars are set to get £1,500, not £3,750. But you’d still think there should be more clarity than this. How ironic that the eco element of the Electric Car Grant is all a bit smoke and mirrors.
Richard Aucock
Editor
Auto Sunday
Get in touch: tristan@autosunday.co.uk
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