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Formula 1 technology and urban driving – who is leading the way?

Dave Hedges

22 February 2018

It has long been understood that Formula 1 has been a leader in accelerating motor technology on the track. Whilst this has helped increase speeds and the success and popularity of the sport, a clear and positive spin off has been the impact on the motor industry. There are many examples of Formula 1 innovation finding its way onto the car forecourt and this has allowed the ongoing development and improvement of the cars we drive in our day to day lives – tyre improvements and semi-automatic gearboxes are two examples that come immediately to mind.

Following F1 we now have FE, or to give it its more precise title, Formula E.  Formula E brings fully electric vehicles into the arena and with this, we are now seeing a race to improve and develop technology in the electric high performance racing car world.

As we have seen in the more traditional car racing sector, a valuable by-product of this is the transferring of the technological improvements into the manufacturing sector. Indeed the President of the FIA – the Federation Internationale de L’Automobile – has referenced the clear link, referring to Formula E as the perfect showcase for new electric vehicle technologies. The clear indication is that the development and advancement of clean engine technology will be transferable and with direct impact in densely populated areas.

A number of recognised car manufacturers are responding perhaps to the opportunity FE provides but they could be more astutely recognising that it offers an opportunity to adapt, as countries seek to look at ways to reduce pollution. Whilst Tesla catch the eye we are seeing increased involvement in Formula E from the likes of Audi, BMW, Mercedes and clear technological advancements are following. Battery life, which has been a limiting factor for many, is improving significantly and this will without doubt help to increase the appeal of electric vehicles. We are already seeing an increase in their use. Countries are certainly encouraging this change. Norway’s stated intention is to ban fossil fuel by 2025, India is considering being all electric by 2032 and China is already the largest electric vehicle market in the world. These dates may seem a little off but in reality for this sector they are very close.

What of the UK? Electric cars are starting to appear and manufacturer’s campaigns are focused on the benefits. Electric charging points are now more prominent. The tax position is also being tilted in favour of electric cars for company car drivers. From April 2020 the taxable benefit for an employee driving an electric car will be based on just 2% of the list price of the vehicle compared with a rate that will rise from the current rate of 9% to 16% in 2019. This is a clear indicator that the Government is committed to a move away from fossil fuels and is seeking to provide stronger incentives to purchase lower emission vehicles. There are already tax breaks for the supply of electricity and the provision of charging points.

Will the future of cars be electric? It seems highly likely that we are now in the midst of a significant shift in the sector. Whilst the technology needs to continue to evolve, the interaction between the manufacturing sector and Formula E will without doubt continue to accelerate this process.

About Dave Hedges

Dave Hedges

Dave has 30 years’ experience in accounting, having trained at HMRC and joined Wilkins Kennedy as a Director in 2015. Working collaboratively with companies’ directors and owner managers, Dave works with employers of all sizes to help them structure tax-efficient remuneration packages for staff members, and self-employed consultants. His deft handling of employment tax related issues results in reducing clients’ HMRC enquiries.

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