The Government has been urged by MPs to examine Vehicle Excise Duty (VED) to try and incentivise the uptake of electric and ultra-low emission vehicles (ULEVs). VED was reformed as part of the 2015 budget, changing from a multi-tiered, scaled-approach to a simpler, three-level approach. The changes will have a substantial impact on fleets. A new car with CO2 emissions of 90g/km and a list price of below £40,000 or less across four years would currently cost nothing to register. Under the new regulations _ which will come into force in April next year _ an identical vehicle would cost £520 over the four years. The Treasury have stated that the aim of the change is to try and make VED 'fairer for motorists and reflect improvements in new car CO2 emissionsî. If the legislation was left unchanged, more than three-quarters of new cars wouldn't cost anything to register. Several MPs on the Energy and Climate Change Committees have said that they regret the Government changes to VED, and have said that the reduced incentives for ULEV uptake could be seen as 'wavering commitment to road electrificationî. A spokesperson for the Treasury said: 'The new VED system still clearly favours the lowest emission vehicles, and the new first-year rates ensure the cleanest cars benefit the most.î The Treasury did note, however, that the Government continues to keep all taxes under review. Denis Naberezhnykh, head of ULEVs and energy for the Transport Research Laboratory, backed the judgement of the committee, saying: 'We fully agree with the committee's assessment. The VED system is not adequate to help the Government meet its zero emission targets.î He also noted that there were a wide range of ULEVs available, from ultra-efficient diesel and petrol models to plug-in hybrids, and that the current system _ which is essentially binary _ did not represent this variation. 'Key stakeholders across the industry need to get together to push for a review. We're a company that bases decisions on clear evidence and as far as we're concerned the Government has not provided the evidence to show that this new taxation structure will work to properly incentivise sales of all ULEVs,î added Naberezhnykh. Certain models will be strongly affected by the new changes. The Mitsubishi Outlander PHEV, for instance, would lead to costs of £290 over three years _ or £910 in the case of high-specification versions. Toby Marshall, UK director of sales and marketing for Mitsubishi, said: 'The VED changes from April next year will have a disproportionately negative impact on PHEVs. 'Government support has undoubtedly helped the segment to grow, but mainstream adoption of this technology is still very much in its infancy and therefore it is too still far early to reduce the financial incentives in place.î