Alex Wright, managing director of Shoreham Vehicle Auctions, believes the current system encourages manufacturers to concentrate on fully electric cars and plug-in hybrids while overlooking vehicles that could provide a practical middle ground.
Wright said SVA regularly encounters three-year-old plug-in hybrid electric vehicles at auction with their charging cables still in their original packaging.
The company believes this indicates that some drivers are using plug-in hybrids principally as petrol cars while benefiting from lower benefit-in-kind tax rates.
Plug-in hybrids are intended to complete shorter journeys using their batteries, with their petrol engines providing support on longer trips. However, drivers who do not charge them regularly may use more fuel and produce higher emissions than intended.
Wright is proposing that the Government introduce dedicated tax treatment for range-extended electric vehicles, or REEVs.
Unlike a conventional plug-in hybrid, a range-extended vehicle is driven exclusively by an electric motor. A small combustion engine acts as a generator when the battery becomes depleted rather than driving the wheels directly.
“The technology exists. The real-world benefits are clear,” Wright wrote on LinkedIn.
He argued that a dedicated tax category could encourage manufacturers to develop vehicles with larger batteries, small auxiliary generators and limited fuel capacity. Electric power would remain the default, with the engine reserved for occasions when the driver could not reach a charger.
The BMW i3 Range Extender is one example previously sold in Britain. It combined an electric drivetrain with a small motorcycle-derived petrol engine that generated electricity when the battery was running low.
Wright also pointed to newer vehicle platforms capable of supporting range-extender technology. However, he believes manufacturers have little commercial incentive to develop such models while the UK tax system recognises only existing categories.
There is currently no announced consultation or policy commitment to create the recommended tax category.
