Porsche on congestion charge: the right move
There are three reasons that Porsche is concerned about London’s impending congestion charge. First the people don’t want it, second it affects the sales of Porsches, and because it unfairly punishes the people by raising money for the city of London through a sort of taxation without direct representation, and is therefore unlawful.
Another observation: Porsche is by no means the carmaker in European Union with the lower overall emissions, but let’s look at the numbers…
The 911 has a 3.6 liter H-6 engine this base Carrera has a combined cycle of 25.7 mpg, with CO2 emissions of 266g/km. The car also costs $73,000 US, or £61,620.
The 2.7 liter H-6 Boxster engine costs $46,000 US or £33,375. It however with it’s smaller engine gets a very reasonable 29.7 mpg on the combined cycle with 227 g/km of CO2 emissions. The 3.4 liter version of that engine produces just 254 g/km. These three models are sports cars. Competitor Ferrari on the other hand produces a V8 engine in the F430, which has output of 420 g/km - quite a lot- and gets only 15.4 miles per gallon. The V12 599 GTB that Ferrari makes produces 490 g/km and drinks a gallon in 13.2 miles.
Ferrari and Porsche are two very different companies with different missions. Both excel in their work and are each others competitors, to be sure. But in defense of Porsche, the goal has always included some level of sustainability. While most carmakers are content producing cars that have a 5-year useful life, Porsche designs cars that last decades. Indeed, some 60%+ of their cars are still on the road.
The EU is mandating the combine fleet economy of cars not exceed 130g/km. So even porsche despite it’s advances, has a long way to go. Ferrari is fortunate however, because parent company Fiat produces some of the world’s lowest emissions cars, and produces far more of those than of the petrol-hungry Ferraris. At the end of the day, demand for Porsche and Ferraris is unlikely to wane.
For a historical perspective, Porsche’s turnover has long been tied to the economy. In tight times, buyers tend to forego sports car purchases, and still with more utilitarian cars, e.g. the Porsche Cayenne sports SUV. This latest economic downturn in the US is also marked by some very special circumstances, that being the skyrocketing fuel prices world-wide. This means Porsche’s fight for survival is on and the business would be unfairly punished by government. Let’s keep in mind that cars are already taxed £8, but former London mayor had hoped with New York’s mayor to charge a massive tax. London’s was set to hit £25/day or about $50US/day.
NYC Mayor Michael Bloomberg’s proposed congestion charge to enter Manhattan between 7am and 7pm was thrown out before reaching the first voting stage on Monday. The $8 toll for cars, or $21 for trucks, was proposed as far back as last July, along with other ‘green’ measures under the PlaNYC proposal. Money raised was supposed to go towards improving NYC’s public transit systems, Bloomberg said.
Critics wondered aloud what kind of traffic jams collection of the charge would cause outside of the pay-to-access areas as well as where the revenue would be spent. Furthermore, the tax would financially strap those who could least afford it.
“The congestion bill did not have anywhere near a majority of the Democratic conference, and will not be on the floor of the Assembly,” said a Democratic Assembly spokesperson, as per the New York Times.
After learning of this proposition, Porsche Great Britain made the move to investigate further. The poll, conducted on behalf of Porsche who began legal action against the Mayor last week, showed that 74% of Londoners believe the £25 charge is unfair.
There is scarcely more support for his plans among those who backed the Mayor in 2004. The poll reveals 65 per cent of those who voted for him last time think the £25 charge is too high, compared to 34 per cent who believe it is about right or not high enough.
The poll also revealed widespread suspicion over the Mayor’s motives for the increase. A clear majority of Londoners (62%) said the main reason for the proposal was because “he is most interested in raising extra money from Londoners” rather than “cutting congestion and helping London’s environment.”
Other key findings from the poll:
- 81 per cent of Londoners believe the increase in the congestion charge will be bad for business in London.
- Over half of Londoners (51%) believe it is unfair that they should be made to pay an extra charge for driving to help the environment when other people in Britain do not have to pay a similar charge.
- 68 per cent of Londoners believe £8 is an unfair amount of money to pay to drive into the congestion zone.
Responding to the poll, Andy Goss, Managing Director of Porsche GB, said, “Londoners agree that the Mayor’s plans to introduce a massive new charge for larger vehicles is totally unfair and is more about squeezing money out of motorists than trying to help the environment. The Mayor should take the chance to reconsider his plans before he leaves us with a system that risks damaging London and irritating massive numbers of people”.
Porsche has opened a website for its legal case where families and motorists across London who will be impacted by the new tax can get more information and add their name to a petition against the charge. The website is available at www.porschejudicialreview.co.uk.
In April, Porsche filed an official judicial review. The review is the first step in getting the congestion charge wiped off the books. Porsche filed its challenge in the High Court of Justice Queen’s Bench Division Administrative Court seeking to quash the mayor’s new charge on the grounds that it is both a disproportionate and illegal action by the Mayor. Porsche has asked the court to expedite the judicial proceedings given the short timeframe in which the new charge is scheduled to be imposed.
The filing of the judicial proceedings continues the judicial review process that began in February when Porsche announced its intention by first writing to then-Mayor Ken Livingstone outlining the grounds of its claim against the charge. The Mayor had far failed adequately to address any of the issues raised in the Porsche claim. Porsche has now taken the next step in the judicial review process by filing its challenge with the High Court.
As noted earlier, the congestion charge has no necessarily obvious impact on the environment. That is, not in the positive way! In April 2008, a report came out to public consumption noting a £25 C-Charge will actually INCREASE CO2 by 182,000 Tonnes. In a report prepared for TfL by King’s College London’s ‘Environmental Research Group’ which used models to assess the impact of the new charge on emissions, the new charge is predicted to create a “very high disbenefit” not only for CO2 but also for NOx, NO2 and PM10, all crucial air quality components.
In fact, the King’s report shows that should the Mayor’s proposal go ahead there will be an increase in CO2 emitted in Greater London in each year from 2009. By 2012, research shows that in Outer London the increase in CO2 will be nearly 184,000 tonnes, with just 2,200 tonnes saved in Central London giving a net increase of 182,000 tonnes. The report indicates that the increase is largely caused by increased car mileage outside of the congestion charging zone as a result of the new charge. These findings directly contradict both Mayor Livingstone’s and TfL’s claims.
All figures previously publicly released by TfL with regard to the impact of the new charge on CO2 emissions, including during the consultation process, related only to the position within the congestion charge zone. TfL has never publicly released estimates taking into account the effect on the whole of Greater London. Instead, they suggested in their ‘Report to the Mayor following consultation’ that the position in Greater London was difficult to assess; other documents provided to the Mayor accepted that if the position outside the congestion charge zone was considered, then this “could reduce the CO2 benefits.” Not only does the King’s report assess the position, it makes clear that it could be far worse than merely a reduction in CO2 – in fact, it predicts a significant increase in CO2.
Commenting on the release of this report, Andy Goss, Managing Director of Porsche Cars GB, said, “We always knew the environmental impact of this unfair tax would be minimal, now we know it will make matters worse. The Mayor and TfL need to explain why this report was not disclosed and why they want to increase taxes on motorists that will increase CO2.”
In the end of it also, lawmakers must acknowledge that advancement in the auto industry is typically the result of consumer demand. If citizens demand more fuel efficiency, automakers will catch on relatively quickly. Lawmakers CAN legislate, but this is typically ineffective because the law never works as fast as the marketplace. Porsche is right to challenge this meaningless proposal. All automakers should join in the fight. Their own livelihoods depend upon it. You, the reader, should also voice your disapproval. Incentive must exist in the marketplace to provide change. Gas prices are high, and may remain so, but at no time can we expect to revert back to the gas-guzzling cars and trucks of the last 100 years. The 21st century is well upon us NOW.