posted 7 months ago

Brexit, Diesels Life Support?

Our co-founder, Terry Hogan, speaks out regarding the possibility of Brexit

Activity on Motoring.co.uk, shows that the number of diesel cars being searched for has remained static over the last six months, with activity for hybrids and electric vehicles increasing by 68 per cent. But what effect would Brexit have on these figures, should it go ahead?

If Britain leaves the EU, it would no longer be held accountable for failing to meet tough EU environmental laws and would be free to repeal them, resulting in a potential reprieve in the decline of diesel. 

Terry Hogan, our co-founder, says: “EU directives have empowered campaigners to hold the UK Government accountable for failing to meet certain emission targets. For example, a legal challenge by environmental lawyers, ClientEarth, citing an EU directive, has led to old diesel lorries, vans and taxis to face charges for driving in highly polluted urban zones. A move away from the EU would almost certainly see the power of campaign groups to challenge the Government fade away.’

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The House of Commons fears that this lack of accountability may result in weaker air quality rules, commenting:

"An EU exit would allow the UK to relax air quality standards and review any deadlines for meeting them. The UK is currently subject to EU infraction proceedings, so exiting would also remove the threat of fines for non-compliance.”

Should Brexit not happen, we predict that 2017 will be the year major manufactures will likely decrease diesel production due to the EU’s tough stance on emissions leading to the rise in the registration of hybrid and electric alternatives. The stunted growth of diesel registrations, coupled with tougher pollution limits and depreciating values, will also play a part in this. 

This also follows a recent report by the Royal College of Physicians and the Royal College of Paediatrics and Child Health that air pollution causes at least 40,000 deaths a year in the UK, with diesel emissions a major factor in this. 

In fact, figures from the Society of Motoring Manufacturers and Traders (SMMT) show that diesel registration growth already slowed to 0.6 per cent in January 2016, indicating a decline when compared with the 2.7 per cent diesel growth recorded in January 2015. 

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Petrol hybrids showed the largest growth for 2015, with registrations up 44.1 per cent proving that manufacturers are responding to consumer demand for more economical options. It was recently reported that some leasing companies are having to cancel orders for plug-in hybrid vehicles as demand is greatly exceeding supply, with some of BMW’s 330e orders cancelled because the company’s UK allocation for right-hand drives had been filled. 

Terry adds: “Our website statistics, coupled with the EU environmental directives and the rapid growth of electric and hybrid vehicles over the last 12 months means that production could start to slow as early as 2017. 

“The Volkswagen emissions scandal last year has had far-reaching repercussions for both manufacturers and consumers. There is now greater scrutiny on emissions from regulators, making it more expensive to produce diesel cars that are compliant with new rules. This has been a particularly large blow for manufacturers who are already facing thin profit margins on diesel models. 

“We are seeing manufacturers bringing forward their hybrid car plans, particularly in Western Europe and the US where taxation and legislation to improve air quality will force the issue.

“If Brexit becomes a reality it may give the diesel decline a brief respite as it takes advantage of the confusion surrounding emission targets and accountability. However, the trends identified on Motoring.co.uk are likely to continue into the future seeing diesel increasingly lose ground to hybrid and electric vehicles.”