CV (tax horsepower)

The tax horsepower or taxable horsepower was an early system by which taxation rates for automobiles were reckoned in some European countries, such as Britain, Belgium, Germany, France, and Italy; some US states like Illinois charged license plate purchase and renewal fees for passenger automobiles based on taxable horsepower. The tax horsepower rating was computed not from actual engine power but by a simple mathematical formula based on cylinder dimensions. At the beginning of the twentieth century, tax power was reasonably close to real power; as the internal combustion engine developed, real power became larger than nominal taxable power by a factor of ten or more.

The so-called RAC horsepower rating was devised in 1910 by the RAC at the invitation of the British government. The formula is:

The formula was calculated from total piston surface area (i.e. "bore" only). The factor of 2/5 accounts for characteristics that were widely seen in engines at the time, such as a mean effective pressure in the cylinder of 90psi (6.2 bar) and a maximum piston speed of 1000 feet per minute (5 metres per second).

The system introduced a somewhat progressive way of taxing higher-value cars more than low-cost ones but was also introduced to protect the domestic British motor industry from foreign imports, especially the Ford Model T. Henry Ford's mass production methods meant that the Model T was competitively priced with British-built cars despite being a much larger, more durable and more powerful car than any similarly-priced model. In 1912 Ford opened a factory to build Model Ts in Manchester, to circumvent the import tariffs that, up to that point, had increased the effective price of foreign cars. Under the RAC's formula the Model T was now a 22 'tax horsepower' car, making it much more expensive to run than its British-built rivals on sale for the same price.

At first the RAC rating was usually representative of the car's actual (brake) horsepower, but as engine design and technology progressed in the 1920s and 1930s these two figures began to drift apart, with an engine making much more power than its RAC rating (and the car's model name) suggested: by 1924 the Austin Seven's 747cc engine produced 10.5 brake horsepower, 50% more than its official rating.

...
Wikipedia