Spring Statement 2025 Reaction

David Bushnell, Director of Consultancy and Strategy, Fleet Operations

“The Spring Statement marks another missed opportunity to provide the leadership and clarity the fleet sector urgently needs. It offers little in the way of the consistent, long-term support needed to give businesses the confidence to invest and to accelerate fleet decarbonisation.

“We recognise the challenges facing the UK’s public finances, including commitments to increase capital and defence spending. But this must be balanced with policies that help the fleet industry invest, grow and lead the transition to zero-emission transport.

“The Department for Transport’s recent extension of the Plug-in Van Grant, announced in February as part of a £120 million funding package, was a welcome move — but it’s hard to see this as anything more than a sticking plaster without broader, joined-up policy.

“At the same time, the withdrawal of the VED exemption for electric vans from April 2025 – aligning them with petrol and diesel models – sends a mixed and unhelpful message to operators who have already committed to cleaner transport.

“Treating 4.25-tonne electric vans as HGVs also continues to undermine progress. These vehicles are performing the same tasks as their 3.5-tonne diesel counterparts – the extra weight is in the battery, not the payload. While electric car adoption continues to accelerate, the eLCV market is playing catch-up. Regulatory alignment is long overdue if we’re to close that gap and support wider commercial EV uptake.

“Elsewhere, public charging VAT remains at 20%, compared to 5% for home charging – a disparity that penalises drivers without access to off-street parking, many of whom rely on used EVs in the second-hand market.

“This is compounded by the Expensive Car Supplement, which adds an additional annual charge to new EVs priced over £40,000 – a threshold that captures a significant proportion of the market. To reflect today’s vehicle pricing, this threshold should be raised to £60,000 for EVs.

“These additional costs undermine the appeal of second-hand electric vehicles and stall progress on wider adoption.

“Extending BIK rates to 2029/30 gives short-term certainty, but fleets are already planning beyond that. We need a longer-term tax roadmap to support confident decision-making and sustained EV growth.

“The fleet sector is ready to lead the charge, but this Spring Statement was a missed opportunity to deliver the consistent, joined-up policy needed to match the ambition.”