People who drive electric vehicles (EVs) face a “tax penalty” that could keep more polluting cars on the roads for longer, a group has warned.
The green consultancy group New AutoMotive says the Government's new vehicle excise duty (VED) reforms will see motorists charged up to £145 more per year for choosing an EV.
At the moment purely electric cars are exempt from VED but this is set to change in a few years' time thanks to plans Chancellor Jeremy Hunt announced as part of the Autumn Budget.
From April 2025 new zero-emission cars will be liable for a first-year rate of £10, and an annual rate of £165 in subsequent years.
Zero-emission cars registered from April 1, 2017 – which is the vast majority of all electric cars on the road – will also be liable for the £165 rate.
Analysis from New AutoMotive calculated that 7.6 million petrol and diesel cars in that category will be liable for no more than £30 VED from April 2025.
The consultancy’s co-founder Ben Nelmes told the PA news agency: “These changes undermine the running cost advantages of owning an EV.
“There will be a large disparity between the VED on electric cars and on many of the more polluting cars on the road.
“This tax penalty may cause people to continue to run older polluting cars for longer.
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“That would increase the UK’s emissions of CO2, as well as reduce lower income households’ ability to access the running cost benefits of purchasing a second-hand EV from 2025.”
A Treasury spokesman said: “Electric vehicle registrations have increased 1,730% since 2016 and sales continue to reach record highs, which is why now is the right time to normalise their role on our roads even more by levelling the playing field on tax with petrol and diesel.
“We continue to support the electric vehicle revolution through over £2.5 billion in incentives, including less year one road tax, nil-rating the Van Benefit Charge and grants to bring down buying costs, and there is also a high bar for the expensive car supplement – around four in five new cars do not cost enough to meet it.”
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