UK auction chief urges new tax category for range-extended EVs
Shoreham Vehicle Auctions MD argues current incentives favor inefficient PHEVs over 'electric-first' range-extender technology.
Alex Wright, Managing Director of Shoreham Vehicle Auctions (SVA), is urging the UK government to establish a dedicated taxation category for range-extended electric vehicles (REEVs). Wright argues that a specific tax class is necessary to incentivize manufacturers to prioritize REEV architecture over traditional plug-in hybrids.
Unlike plug-in hybrid electric vehicles (PHEVs), where the engine can directly drive the wheels, REEVs are driven exclusively by an electric motor. In these vehicles, the internal combustion engine serves solely as a generator to charge the battery. Wright points to existing technology such as the BMW i3 range-extender and Nissan’s e-Power system—used in the Qashqai and X-Trail—as evidence that the hardware is already viable. He further notes that Renault's new platform is designed for range-extender compatibility, suggesting the technical architecture is ready for wider adoption.
This push for policy change comes as the UK uses Benefit-in-Kind (BiK) rates and other incentives to transition the fleet toward full electrification. While PHEVs were designed as a stepping stone, Wright observes a troubling trend in the used car market. He reports that three-year-old PHEVs frequently arrive at auction with their charging cables still in the original packaging, indicating the vehicles were rarely charged and effectively operated as standard petrol cars.
Wright contends that current policy creates a misalignment between technology and incentives. "Right now, manufacturers are largely forced to choose between building a full EV or a PHEV," Wright said. "But there’s a very practical middle ground that should be recognised in the UK tax system, an electric vehicle with a small ‘get-you-home’ engine."
By shifting the tax advantage toward REEVs, the government could encourage an "electric-first" approach. This would provide drivers with a safety net for long-distance travel without the behavioral loopholes and efficiency losses associated with PHEVs. According to Wright, "Manufacturers follow incentives. The tech is ready, but the policy isn’t."
Whether the government will carve out a new tax category remains to be seen. If implemented, such a move could accelerate the adoption of true electric drivetrains and potentially stabilize residual values in the used market by reducing the prevalence of underutilized hybrid technology.