A Guide To WLTP (Worldwide Harmonised Light Vehicle Test Procedure)
WLTP | The Background
Against the background of several emissions scandals, there is a change in vehicle emissions testing. As a result, a far more rigorous and comprehensive test is welcome to assist purchasers with the vehicle selections they make. The move from New European Driving Cycle (NEDC) to Worldwide Harmonised Light Vehicle Test Procedure (WLTP) started in September 2017. After reading our guide to WLTP, you should be well adept at understanding the emissions testing process.
You can find some changes in the testing regime below.
For a complete list of changes, please go to http://wltpfacts.eu/from-nedc-to-wltp-change/.
Testing for new vehicles is underway using the WLTP system. The NEDC equivalent is recording results too.
In effect, vehicles will have two emissions profiles for an interim period. Importantly for company car drivers, NEDC acts as the basis for company car taxation for the time being.
From April 2019, HMRC will likely use the WLTP system for taxation purposes.
What does this mean for company car policies?
If initial test result differences are a sign of things to come, then emissions have generally been understated. The understatement in some of these cases is vast. For organisations that base their vehicle policies on whole life cost (WLC) or total cost of ownership principles (TCO), vehicles will be more expensive. Manufacturers of those vehicles particularly badly hit will struggle for volume and challenge profitability levels.
Employees will likely see a significant downgrade in vehicle selection once the tax changes to a WTLP basis. Therefore, what can you do between now and Spring 2019 to help offset these challenges?
- Keep reviewing and refining current car choice lists, including regular manufacturer updates to ensure support terms assist in maintaining choice levels.
- Consider delaying replacing current cars (either via informal or formal extending current leases) until the provision of further clarity.
- Consider utilising short-term hire cars to mitigate problems ordering vehicles.
- Most importantly, prepare for a full review of Car Policy when the full impacts become known.
The impact of the WLTP changes and subsequent government announcements on BIK are likely to be significant. As a result, continued stabilisation ensure car choices remain appropriate. We recommend fleets start preparing for a full review of the Car Policy. Consider stakeholder alignment, future business objectives, review benefit requirements and communication plans. Consequently, this will ensure preparation for the changes and help ease the pressure on your organisation and employees once the impact of these changes is fully known.
If you would like some more information on our guide to WLTP or support addressing the impact of WLTP on your fleet policy or purchasing decisions, please contact us.