- Treasury scrambles to cut EV charging costs
- Vertu looks to close two West Country sites
- Hilary Benn responds to NFDA about type approval
- Mercedes-Benz CLA is Car of the Year at Brussels Motor Show
- WEEK AHEAD: UK unemployment
- UK cars older than ever
- Student loan interest bill exceeds repayments
- China car sales to be flat in 2026
- US car sales forecast to decline in 2026
- OPINION: Volume without margin is not a strategy
Treasury scrambles to cut EV charging costs
Fears that a new pay-per-mile tax will kill off EV demand has seen the treasury “scramble to cut electric car charging costs”, reports The Telegraph. It follows official forecasts that 2028’s 3p a mile charge on EVs will hammer sales.
It is understood the treasury is focused on cutting ‘network charges’ at public charging points, which have increased significantly. Standing charges are said to make up more than half the cost drivers are paying for electricity.
It is also looking at reducing the 20% VAT on electricity at public chargers, something the SMMT has been demanding for some time now.
“Officials have held meetings with industry experts in recent weeks to discuss options to reduce the burden on motorists,” reports The Telegraph.
The OBR has forecast an estimated 440,000 fewer EVs will be sold because of the pay-per-mile tax.
Vertu looks to close two West Country sites
Vertu is consulting on the closure of its Barnstaple Peugeot and Volvo site and its Launceston Peugeot dealership following an assessment of viability.
The Devon and Cornwall locations are understood to be unlikely to yield viable profits in future given rising costs, future investment requirements and the size of their markets.
Both businesses were acquired by Vertu when it bought 22 Helston Garages operations in 2022.
Hilary Benn responds to NFDA about type approval
Northern Ireland secretary Hilary Benn has responded to the NFDA about challenges faced by the Northern Ireland motor industry.
Benn addressed vehicle type approvals, confirming the government intends to legislate to mandate that vehicles sold in Great Britain must hold dual GB and EU type approvals. This will allow seamless sales in both Great Britain and Northern Ireland.
The Department for Transport has launched a call for evidence on why some OEMs have not adopted dual approval. It remains open until 12 February.
Benn also confirmed a temporary easement for PHEVs, reports the NFDA, “mitigating the rising benefit-in-kind tax resulting from new emission standards”. This applies to Northern Ireland “irrespective of consultation outcomes in Great Britain”.
Both measures “aim to create a more effective single UK market for vehicles, preserving consumer choice and providing flexibility for car dealerships”.
Mercedes-Benz CLA is Car of the Year at Brussels Motor Show
The Mercedes-Benz CLA has been named European Car of the Year at the 2026 Brussels Motor Show. It won by a landslide, scoring 100 more points than the second-placed Skoda Elroq.
The Brussels Motor Show has become one of the key new car shows of the year in Europe. This year’s event was a sell-out, with a waiting list for exhibitor space. Organisers say around 300,000 people are expected to visit – with the show used by a high proportion of consumers to sign on the dotted line and buy their next new car.
WEEK AHEAD
Tuesday, UK unemployment
Thursday, GDP
Thursday, RICS housing market survey
* Have an event or announcement coming up? Let us know and we will include it for FREE
DATA INSIGHT
UK cars older than ever
9.5 years: Average age of a car in the UK. In 2005, it was 6.7 years, meaning it’s risen 41.6% in two decades. David Bailey of the Birmingham Business School blamed flip-flopping EV policy, with consumers “hanging on to ICE cars for longer”.
Student loan interest bill exceeds repayments
£15.2bn: The amount of interest added to student loans last year. Only £5bn was repaid. MPs and campaigners have called students loans a “mis-selling scandal waiting to unfold”.
GLOBAL AUTO
China car sales to be flat in 2026
Chinese new car registrations are expected to be flat in 2026 as many cities and provinces reduce or suspend government electric car subsidies. 2025 growth of 3.9% was the slowest in three years, while EVs and PHEVs only grew 18%, compared to 41% in 2024.
Despite this slowdown, EVs and PHEVs still outsold ICE for the first time annually.
US car sales forecast to decline in 2026
US new car registrations are forecast to decline in 2026 for the first time in four years. Cox Automotive blames a growing affordability crunch for sales likely to fall from 16.3m in 2025 to 15.8m in 2026.
2025 was the best year for US new car sales since 2019.
OPINION
Volume without margin is not a strategy
Much of the commentary around new car market disruption still fixates on volume and I can be as guilty as any on this matter; who is gaining share, who is losing it, and why. That focus risks missing a more dangerous shift: a slow but persistent erosion of margin.
For many established brands, the threat is not that customers suddenly disappear. It is that they stay – but at a lower level of profitability. That is a far harder problem to solve and it’s one the impacts both retailers and manufacturers.
New entrants have not just expanded choice; they have reset expectations. Standard specification is high, pricing is low and quality is good. This makes differentiation difficult. Once that happens, legacy brands face an awkward dilemma: defend price and risk losing customers, or defend volume and accept thinner returns.
Neither option is attractive, particularly for OEMs and retailers carrying cost structures built for a different era. Legacy overheads assume a degree of pricing power that is becoming harder to sustain. Discounting does not need to be aggressive to be corrosive; even modest incentives, repeated quarter after quarter, quietly hollow out profitability. And we all know how thin margins were to start with.
The danger is that this plays out unevenly. A brand may still look healthy in the registration tables while its retailers struggle to generate acceptable returns. That disconnect is already visible in parts of the market. Volume masks pain.
There is also a strategic trap here. If incumbents respond primarily by chasing share, they risk accelerating the very margin compression they fear. Many, but not all, new entrants can often afford to price keenly for longer, backed by patient capital or different success metrics. Established brands rarely have that luxury.
For retailers, this is where discipline matters. Adding volume without contribution is not growth. The industry has spent years telling itself that scale solves most problems. It could be that in this new era, scale without margin may simply magnify them.
The uncomfortable conclusion is this: the next phase of disruption may not produce dramatic collapses or headline-grabbing exits. It may instead produce something quieter and more damaging – an industry that still sells plenty of cars, but makes meaningfully less money doing so.
That is a far harder crisis to explain, and an even harder one to fix.
Tristan Young
Editorial Director
Get in touch: tristan@autosunday.co.uk
ISSN 2977-6597