Updated: Electric car firms celebrate end to new congestion charge plans

The decision last week by London mayor Boris Johnson to scrap plans to charge the most polluting vehicles £25 a day for entering the city's congestion charge zone may have angered many environmentalists, but not all green businesses were disappointed by the news.

Two of London's leading electric car suppliers – GoinGreen, the company providing the G-Wiz, and the Nice Car Company, which supplies the MEGA City – are celebrating the axing of the proposed reforms which they feared would dampen demand for electric vehicles.

Under the proposals put forward by former mayor Ken Livingstone, not only would the most polluting vehicles be charged £25 a day to enter the zone, but the exemption from the congestion charge currently offered to electric vehicles would have been extended to low-emission vehicles emitting fewer than 120g of carbon dioxide per km.

"There was no granularity in the proposals," said Steve Hartridge, managing director of GoinGreen. "It somehow did not seem right that zero-emission electric vehicles should sit alongside petrol and diesel vehicles as exempt from the charge even if they are very efficient cars." He added that while there was a case for levelling higher charges against the most polluting vehicles, there needed to be more of a "sliding scale" approach to charges that ensured the most generous incentives continued to benefit genuinely zero-emission vehicles.

The axing of the proposed changes were similarly welcomed by Nigel Wonnacot, spokesman for the Nice Car Company, who said the firm was pleased financial incentives enjoyed by electric cars over low-emission petrol and diesel vehicles will remain in place. "We want to see clear measures that drive people towards the cleanest cars, not just cleaner cars," he said. "There was an argument that Ken's changes would have even led to more congestion by encouraging more people to drive low-emission vehicles into the zone."

However, Barry Shrier, managing director of Liberty Electric Cars, which specialises in providing electric powered Land Rovers, said that it was a shame that the plans had been scrapped. "Extending the exemptions to cars with emissions of under 120g per km would have helped lower overall emissions and encourage people to look at more efficient cars," he said, adding that in the longer term electric cars would have to compete with conventional vehicles based on their performance rather than ther incentives they enjoy.

But while electric cars will continue to enjoy preferential treatment with regards to the congestion charge, another key incentive is set to end after City of London council last month announced that it was to end free parking for the vehicles.

Under the changes, existing users of the borough's electric vehicle scheme will see an increase in on-street parking charges from zero to £50 per year. The cost of parking in the City's car parks will increase from zero to £2,000 per year in 2009. The off-street parking fee will increase further to £4,000 per year by 2010 and £6,396 in 2011, bringing it into line with the charges for conventional cars.

The City of London said the incentive was being removed as it had proved so successful that it had increased vehicle use in the borough.

Wonnacott said that the decision "flew in the face" of the support being offered to electric cars by other councils. "When you compare it to Westminster Council's plans for more electric car charging points it is a very disappointing move," he said.

Hartridge said with the decision coming at a time when the government signalled increased use of electric cars would form a central plank of its strategy to meet emission-reduction targets, it displayed a "lack of joined-up thinking".

He added that the changes were unlikely to derail the positive momentum being enjoyed by the sector. "We're seeing real interest from customers," he said. " The rising petrol price is obviously playing a part while the government's recent support for electric cars has also helped drive interest."