DVLA is currently trialling/testing the use of Electronic Number Plates within the UK. These tests are starting because the UK law has been adapted to allow for the electronic tags of all cars in the future:
The Vehicles (Crime) Act 2001 introduced a provision to enable the making of regulations specifying additional information to be displayed on or contained in number plates. The provision was deliberately worded so as to allow for the possible use of microchips in number plates. This provision would have to be activated for the use of electronic plates in a live environment.
The electronic number plates could be used across Europe to track vehicles for surveillance and road pricing purposes. Currently the DVLA is erring towards using RFIDs on vehicles.
In April 2006, DVLA’s partner IBM, were commissioned to produce an analysis of consideration for introducing an RFID based system for the purposes of vehicle identification and road pricing. In summary, the analysis concluded the active tag would appear to be the only proven solution to identify a moving vehicle at a reasonable distance in freeflowing traffic
The range of the RFID could be up to 100m, according the DVLA.
The privacy issues in relation to this have not been addressed at all by the DVLA, nor do they appear to have consulted the ICO.
Full DVLA report available here DVLA Electronic Numer Plate Report
Other Articles on the subject are