The Business Car Files Volkswagen UK
Owen Shepherd, UK head of direct sales
Owen Shepherd says new PHEV tax rates are unlikely to change Volkswagen’s product plans, with the brand already eyeing further EV expansion. Sean Keywood reports.
Volkswagen has recently introduced several plug-in hybrids, including versions of its Golf, Tiguan, and Passat, with EV ranges of more than 70 miles, which therefore fall into the 5% BIK company car tax band as the rates currently stand. The future company car tax rates published with the Budget reveal that this 5% rate, already scheduled to rise to 8% by 2027-28, will then rise to 18% for 2028-29, and 19% for the year after that. This might sound like bad news for Volkswagen, given its product line-up – but Shepherd says he is unconcerned about the prospect.
He says: “We’ve got three years where [plug-in hybrid BIK rates are] still sitting 3% above the EV BIK. I think by the time we get to 2028-29, with where the ZEV mandate is and the inability to use plug-in hybrid credits at that point, we’d have been moving away from plug-in hybrid at that point anyway … because we need to increase the electric threshold through those years to hit the ZEV mandate targets.
“So, I don’t think it’s going to have a massive impact on our plug-in hybrid strategy in the short term. The products are great, from our perspective in terms of the range they provide. They’ve been really, really popular since we launched them earlier this year, particularly in the corporate segment, so there’s a demand out there for them, perhaps for those who aren’t quite ready for the move to full electric just yet but can get used to charging them, seeing what they can do on the electric-only range, then the next time around move into full EV.
“We still think there’s a space for them and I don’t think [the Budget] changed that.” When asked by Business Car if the 5% BIK rate had caused the plug-in hybrids to take sales away from VW’s pure-electric ID cars rather than ICE vehicles, Shepherd, who has been in his current role since August 2022, says: “I was a little bit worried about that when we launched them, but I don’t think we’re seeing that in terms of what we’re doing. “We’ve not seen a drop off in our ID order take since we launched [the plug-in hybrids]. If anything, it’s enhanced as well.
Above: Owen Shepherd UK head of direct sales Volkswagen UK, F
or car company fleet bosses such as Volkswagen head of direct sales Owen Shepherd, the first Budget delivered by the new Labour Government was always
likely to be of great interest. 38 | November/December 2024 |
www.businesscar.co.uk
However, according to Shepherd, one of the main Budget news items for car fleets – big future increases to plug-in hybrid company car tax rates – is not likely to provoke major changes in Volkswagen’s approach to the vehicles.
“The IDs continue to perform pretty well, particularly with the launch of the Match trims earlier this year, and plug-in hybrid hasn’t really changed the run rate at all on those.” Shepherd says that, as with retail customers, there is still an education element needed with corporate or leasing end-user drivers about moving to full
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