- Rachel Reeves is considering introducing a pay-per-mile tax for electric vehicles (EVs) in the upcoming budget.
- The proposed tax would involve a 3p-a-mile charge for EV drivers, in addition to other road taxes.
- This new charge is estimated to cost EV owners an average of £250 per year.
- The primary goal of the tax is to compensate for the decreasing revenue from petrol and diesel cars as more drivers switch to greener options.
- A government spokesperson indicated that the aim is to establish a “fairer system,” as fuel duty currently applies to petrol and diesel but not to electric vehicles.
- The additional revenue generated from this tax would help address a financial shortfall estimated to be between £20bn and £30bn by the end of the parliament.
- The scheme is projected to commence in 2028, following a consultation period.
- The Society of Motor Manufacturers and Traders (SMMT) criticized the proposal, stating it would be “entirely the wrong measure at the wrong time” for the UK’s EV transition.
- Jon Lawes of Novuna Vehicle Solutions also expressed criticism, emphasizing that the cost of EVs and charging availability remain significant barriers.
- According to the provided website, there are currently over 1.3 million electric cars on UK roads.
- By 2028, it is anticipated that approximately 4 million people will be driving electric cars or vans.
- Analysis by the Energy and Climate Intelligence Unit (ECIU) suggests that even with a 3p-a-mile tax, EVs would still be £1,000 cheaper annually to run than petrol cars.
- Both the Campaign for Better Transport and the Tony Blair Institute have previously advocated for pay-per-mile road charging schemes.
- The government has invested £4bn to support the transition to electric vehicles, including grants that can reduce upfront costs by up to £3,750 per eligible vehicle.
- The government also stated it would explore further support measures to enhance the convenience and affordability of owning electric vehicles.