Background
'The government has already taken significant action to improve air quality. The UK was the first country in the world to announce in 2011 our intention that conventional car and van sales would end by 2040, and for almost every car and van on the road to be a zero emission vehicle by 2050.'
Source: UK plan for tackling roadside nitrogen dioxide concentrations An overview July 2017 P4
Theory
This policy will fundamentally change the transport sector in the UK.
Data
The Need for Cars in the UK
In 2017, 78% of the total distance travelled was by car.
Source: National Travel Survey: England 2017
Source: The Car in British Society The Commission for Integrated Transport noted in its “Medium-length Trip Patterns” report that 42 per cent of car mileage was driven on medium-length car trips (defined as 5 – 25 miles).
Source: https://www.racfoundation.org/motoring-faqs/mobility#a22
The Types and Numbers of Conventional Vehicles in Great Britain 2017.
Other vehicles includes rear diggers, lift trucks, rollers, ambulances, Hackney Carriages, three wheelers, tricycles and agricultural vehicles.
Petrol and Diesel cars were the dominant vehicle in the UK in 2017.
The Types and Numbers of Ultra Low Emission Vehicles in Great Britain 2017.
In this data Great Britain includes England, Scotland, Wales and N. Irelannd.
Source: Department for Transport statistics (https://www.gov.uk/government/collections/vehicles-statistics) Table VEH0102 (TSGB0903) Licensed vehicles at the end of the year by body type, Great Britain from 1994; also United Kingdom from 2014
Source: DVLA/DfT. Last updated: 12 April 2018. Next update: April 2019
Source: Department for Transport statistics (https://www.gov.uk/government/collections/vehicles-statistics) Table VEH0130 Ultra low emission vehicles (ULEVs) 1 licensed at the end of quarter by bodytype, including regional breakdown for the latest quarter, United Kingdom from 2010 Q1
1. Department for Transport uses the term 'ultra low emission vehicles' to refer to vehicles with significantly lower levels of tailpipe emissions than conventional vehicles. In practice, the term currently refers to electric, plug-in hybrid and hydrogen fuel-cell vehicles. For the purposes of this indicator, all vehicles with fully electric power or with tail-pipe emissions below 75 g/km of CO2 have been included.
2. Includes all vehicles of models that are eligible for the plug-in grants at the date of latest table update. Therefore earlier data in the series may be changed retrospectively as models are added to the eligible list. For more details, see:https://www.gov.uk/plug-in-car-van-grants/eligibility
3. Data available for Great Britain only.
There are very few Ultra Low Emission Vehicles in the UK in 2017.
The Ratio of Conventional Vehicles to Ultra Low Emission Vehicles in the UK in 2017.
In the UK in 2017 there were 37,735,000 petrol and diesel to 336,552 Ultra Low Emission Vehicles.
This allows for a 112 to 1 ratio.
Therefore 112 petrol and diesel cars will currently become defunct post 2040 for every new Ultra Low Emission Vehicles in use.
Source: https://en.wikipedia.org/wiki/United_Kingdom
Source: Google Search
Source: www.UKometers.info/UK-population/uk-population/
This equates to 1 petrol and diesel vehicle for 1.7 people in the UK in 2017.
The Ratio of Ultra Low Emission Vehicles to the Total Population of the UK in 2017.
Source: https://en.wikipedia.org/wiki/United_Kingdom
Source: Google Search
Source: www.UKometers.info/UK-population/uk-population/
This equates to 1 Ultra Low Emission Vehicles for 198 people in the UK in 2017.
The Ratio of Conventional Vehicles to Total Households in the UK in 2017.
Source: https://en.wikipedia.org/wiki/Postcodes_in_the_United_Kingdom
Source: https://en.wikipedia.org/wiki/Postcode_Address_File
Source:https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/datasets/familiesandhouseholdsfamiliesandhouseholds
Source: Labour Force Survey (LFS), Office for National Statistics
This equates to 1.3 petrol or diesel vehicles per 1 household in the UK in 2017.
The Ratio of Ultra Low Emission Vehicles to Total Households in the UK in 2017.
Source: https://en.wikipedia.org/wiki/Postcodes_in_the_United_Kingdom
Source: https://en.wikipedia.org/wiki/Postcode_Address_File
Source:https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/datasets/familiesandhouseholdsfamiliesandhouseholds
Source: Labour Force Survey (LFS), Office for National Statistics
This equates to 0.01 Ultra Low Emission Vehicles per 1 household in the UK in 2017.
Costs of Conventional Vehicle to Ultra Low Emission Vehicle in the UK in 2017.
The best selling car in the UK in 2017 was the Ford Fiesta
Average price approx. £14,000
Insurance Cost approx. £808 per annum
Annual fuel cost approx. £945
Annual Road Tax approx. £140
Maintenance approx. £100
Total for first year approx. £15,993
Total for other years approx. £1,993 approx £2,000
Yearly cost not allowing for depreciation or resale only as ongoing debt £17,986 per annum
Source: https://www.autoexpress.co.uk/best-cars/94280/best-selling-cars-in-the-uk-2018
Source: https://inews.co.uk/essentials/lifestyle/cars/car-features/uks-top-10-popular-cars-2/
Source: https://www.statista.com/statistics/299018/car-models-which-sold-the-most-in-the-united-kingdom/
Source: https://www.carbuyer.co.uk/reviews/recommended/best-selling-cars
Source: https://www.motoringresearch.com/car-news/most-popular-cars-in-britain-2017/
Source: https://www.driving.co.uk/news/uks-top-10-best-selling-cars-2018/
Source: https://www.carlogbook.co.uk/most-popular-cars.aspx
Source: https://www.autocar.co.uk/car-news/industry/top-10-best-selling-cars-britain
Source: https://www.whatcar.com/ford/fiesta/hatchback/review/n106/buying-owning
Source: https://www.comparethemarket.com/car-insurance/ford/fiesta/ord/fiesta/hatchback/review/n106/buying-owning
Source: https://www.autocar.co.uk/car-review/ford/fiesta-2008-2017/mpg
Source: https://www.parkers.co.uk/ford/fiesta/hatchback-2017/car-tax/
Source: National Travel Survey: England 2017 and Table NTS0901
Source: Fuel Costs. Based on a mileage of 192 miles per week and a fuel price of 136.5 p/litre in a FORD Fiesta 1.5 TDCi Style 85PS fuel costs
Source: https://www.nextgreencar.com/cost-calculators/ford/fiesta/
Source: Parking Costs.
The best selling Ultra Low Emission vehicle in the UK in 2017 was the Mitsubishi Outlander (Hybrid Petrol and Electric).
Average price approx. £37,000
Insurance Cost approx. £808 per annum
Annual fuel cost £50 mpg (4.5litres) on petrol and 20 miles on electric.
Four hours battery recharge approx.
Hybrid fuel system.
Fuel Cost approx. 1 litre = £1.31. Electricity £13p per kwh approx.
50 x 1.31 = £65.50, 20 x 0.13 = £2.60 = Total approx £70 for 70 miles travel. £1 per mile.
Allowing 192 miles per week x 52 weeks.
Total cost approx £10,000 per annum.
Annual Road Tax approx. £130
Maintenance approx. £200
Total for first year approx. £48,138
Total for other years approx. £11,138
Yearly cost not allowing for depreciation or resale only as ongoing debt approx. £60,000 per annum
Source: https://www.mitsubishi-cars.co.uk/new-cars/outlander/phev/
Source: https://www.carbuyer.co.uk/reviews/mitsubishi/outlander/phev-suv/mpg
Source: https://www.autocar.co.uk/car-review/mitsubishi/outlander-phev
Source: Milage. https://www.mitsubishi-cars.co.uk/new-cars/outlander/phev/fuel-calculator/#/
The variance in initial manufacture, purchase costs for a hybrid vehicle make it 3 times as expensive as a standard petrol or diesel car to manufacture and use.
The increasing scarcity of petrol or diesel and the varying cost of electricity will also make th ehybrid car more expensive up to 2040. The intermittent nature of renewable enegry will make the use of hybrid and electric cars intermittent unless domestic battery backup storage is allowed for.
Source: https://www.edie.net/news/6/Ultra-low-emission-vehicle-sales-surge-in-the-UK/
Source: https://www.click4reg.co.uk/blog/ultrlow-emission-vehicles-rise-by-27/
Source: Inspired, click4reg.co.uk analysed data released by the Department for Transport in Vehicle Licencing Statistics
In 2017 the total cost of a petrol or diesel vehicle was less than the total cost of an Ultra Low Emission vehicle.
Tax Revenue Issues
The Total Tax Revenue from all Motor Vehicles in the UK in2017 was
Total Vehicles from Data 37,735,000
Vehicle Excise Duties £5,800,000,000
Per car £154
Fuel Duties £27,900,000,000
Per Car £739
There will be a reduction in the £5,000,000,000 per annum tax for vehicle excise duties as petrol and diesel car numbers reduce up to 2040.
There will be a reduction in the £27,900,000,000 per annum tax for fuel duties as petrol and diesel car numbers reduce and electric and Ultra Low Emission Vehicles are introduced up to 2040.
Alternative sources of revenue will be needed to maintain the existing infrastructure or to fund new vehicle concepts.
Source:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_
data/file/720080/FOI2018-07265_-_ Fuel_duty__VAT_and_VED_revenues.pdf
Source: https://www.gov.uk/government/publications/fuel-duty-vat-and-vehicle-excise-duty-revenues
Source: https://www.theguardian.com/politics/2017/jul/26/treasury-tax-electric-cars-vat-fuel-duty
The Total Tax Revenue from all motor vehicles in the UK in 2017 compared to the Total Tax Revenue from all Ultra Low Emission Vehicles in UK after 2040 can be calculated.
£51,829,008 / £5,800,000,000 x 100 = reduction to 0.89% of Current Vehicle Excise Duties Revenue.
£248,711,928 / £27,900,000,000 x 100 = reduction to 0.89% of Current Fuel Duties Revenue.
Whilst the total revenue from vehicles and fuel is not large the drop in total revenue from conventional vehicles to Ultra Low Emission vehicles is significant.
Manufacturers Issues
Taken from the two most popular vehicles in the UK examined earlier. Two manufacturers Ford and Mitsubishi can be examined to identify how they are structured financially and by production numbers to produce a single vehicle.
The Ford Motor Company in 2017 is set up to produce conventional vehicles in the following model.
Total Wholesale Vehicle Sales approx. 6,607,000
Total Automotive Revenue approx. $145,000,000,000, £113,089,850,000
Average Revenue per Vehicle approx. $22,000, £17,239
Gross Margin on Automotive approx. 10%
Profit Before Taxes approx. 5%
Cost of Car approx. $22,000, £1,723.86
Gross Margin approx. $2,200, £1,724
Profit Margin approx. $1,100, £862
Ford makes on car approx. £862
Ford has to sell approx. 26 cars to finance 1 car
Source: https://evannex.com/blogs/news/tesla-model-3-profit-target-is-5x-higher-than-the-average-vehicle-from-ford
Source: Ford Annual Report 2017
The Mitsubishi Motor Company in 2017 is set up to produce conventional vehicles in the following model.
Total Wholesale Vehicle Sales approx. 1,000,000
Total Automotive Revenue approx. £44,485,736,833
Average Revenue per Vehicle approx. £44,485
Gross Margin on Automotive approx. 6%
Profit Before Taxes approx. 6%
Cost of Car approx. £44,485
Gross Margin approx. £2,669
Profit Margin approx. £160
Mitsubishi makes on car approx. £160
Mitsubishi has to sell approx. 278 cars to finance 1 car
Source: https://www.mitsubishi-motors.com/content/dam/com/ir_en/pdf/anual/2017/annual2017.pdf
Source: https://www.mitsubishicorp.com/jp/en/ir/finance/highlight/highlight03.html
Source: https://ycharts.com/companies/MSBHY/gross_profit_margin
Once Fossil fuels are phased out the ability to manufacture vehicles at the current 2017 rates will no longer be possible since current automotive manufacturing is a high user of fossil fuels.
Source: https://www.eia.gov/outlooks/ieo/pdf/transportation.pdf
When petrol and diesel cars are phased out companies like Ford and Mitsubishi will have to develop a new form of financing to produce less vehicles for less finance return per vehicle and for less assistance from each government due to the loss in vehicle tax and fuel tax revenue.
Vehicle manufacturers will also have to reform their structure to allow for new resources, design, fuels, batteries, chargers, testing, licensing, approvals, manufacturing methods, new factories, new distribution methods, new maintenance facilities, new remote fuel and charging facilities and new recycling systems to produce Ultra Low Emission Vehicles.
Ultra Low Emission Vehicles will therefore cost more than conventional petrol and diesel vehicles since the conventional vehicles are already mass produced and so have absorbed their initial capital development costs.
There are significant issues relating to automotive manufacturing that need to be overcome post fossil fuel phase out.
Age of Vehicles in the UK
Department for Transport figures show that in 2017, petrol cars were generally older, with an average age of 9.1 years, compared with just 6.6 years for diesel cars. Ultra Low Emission Vehicles were much newer with an average age of 3.5 years.
Source: Society of Motor Manufacturers and Traders – Motor Industry Facts 2018
Amount of Energy to Build an Electric Car as a Conventional Vehicle.
The Ultra Low Emission Vehicles will need alternative capital for new resources, design, fuels, batteries, chargers, testing, licensing, approvals, manufacturing methods, new factories, new distribution methods, new maintenance facilities, new remote fuel and charging facilities, new recycling systems.
The Ultra Low Emission Vehicles will therefore cost more than conventional petrol and diesel vehicles since the conventional vehicles are already mass produced and so have absorbed their initial capital development costs.
Source: https://www.rac.co.uk/drive/advice/emissions/are-electric-cars-actually-worse-for-the-environment. RAC Drive
Source: Fraunhofer Institute for Building Physics
Source: IVL Swedish Environmental Research Institute
Carbon Footprint for Vehicle Types.
The Carbon Footprint for types of vehicles can be calculated.
2.23 tonnes CO2e: 12700 km per year in a Average Petrol Car.
Source: https://www.carbonfootprint.com/calculator.aspx
2.16 tonnes CO2e: 12700 km per year in a Average Diesel Car
Source: https://www.carbonfootprint.com/calculator.aspx
1.53 tonnes CO2e: 12700 km per year in a Average Petrol Hybrid
Source: https://www.carbonfootprint.com/calculator.aspx
1.40 tonnes CO2e: 12700 km per year in a Average Petrol Motorbike
Source: https://www.carbonfootprint.com/calculator.aspx
3.12 tonnes CO2e: 12700 km per year in a Average Van Diesel van up to 3.5 tonne average value.
Source: https://www.carbonfootprint.com/calculator.aspx
Source: https://www.bbc.co.uk/news/uk-england-28546589 Drivers milage rates
The carbon footprint analysis initially indicates that a hybrid vehicle has a lower CO2e footprint than conventional petrol and diesel vehicles. This does not however allow for the CO2e from the development of the new Ultra Low Emission Vehicles. The Ultra Low Emission Vehicles will also produce additional C02e for the development, manufacture and use of new resources, design, fuels, batteries, chargers, testing, licensing, approvals, manufacturing methods, new factories, new distribution methods, new maintenance facilities, new remote fuel and charging facilities, and new recycling systems.
Ultra Low Emission Vehicles will produce more C02e than conventional petrol and diesel vehicles due to their new development, manufacturing and running CO2e emissions.
Conclusions
In 2017, 78% of the total distance travelled was by car.
Petrol and Diesel cars were the dominant vehicle in the UK in 2017.
There were very few Ultra Low Emission Vehicles in the UK in 2017.
Therefore 112 petrol and diesel cars will currently become defunct post 2040 for every new Ultra Low Emission Vehicles in use.
There is currently 1 petrol and diesel vehicle for 1.7 people in the UK in 2017.
There is currently 1 Ultra Low Emission Vehicles for 198 people in the UK in 2017.
There is currently 1.3 petrol or diesel vehicles per 1 household in the UK in 2017.
There is currently 0.01 Ultra Low Emission Vehicles per 1 household in the UK in 2017.
In 2017 the total cost of a petrol or diesel vehicle was less than the total cost of an Ultra Low Emission vehicle.
There will be a reduction in the £5,000,000,000 per annum tax for vehicle excise duties as petrol and diesel car numbers reduce up to 2040.
There will be a reduction in the £27,900,000,000 per annum tax for fuel duties as petrol and diesel car numbers reduce and electric and Ultra Low Emission Vehicles are introduced up to 2040.
Alternative sources of revenue will be needed to maintain the existing infrastructure or to fund new vehicle concepts.
Whilst the total revenue from vehicles and fuel is not large the drop in total revenue from conventional vehicles to Ultra Low Emission vehicles is significant.
There are significant issues relating to automotive manufacturing that need to be overcome post fossil fuel phase out.
Department for Transport figures show that in 2017, petrol cars were generally older, with an average age of 9.1 years, compared with just 6.6 years for diesel cars. Ultra Low Emission Vehicles were much newer with an average age of 3.5 years.
The Ultra Low Emission Vehicles will cost more than conventional petrol and diesel vehicles since the conventional vehicles are already mass produced and so have absorbed their initial capital development costs.
Ultra Low Emission Vehicles will produce more C02e than conventional petrol and diesel vehicles due to their new development, manufacturing and running CO2e emissions.