Millions of drivers could be put off from buying an electric car because of new pay-per-mile car taxes, which are set to be introduced in the coming years.
Former Chancellor Rachel Reeves confirmed the controversial introduction of the new Electric Vehicle Excise Duty (eVED) in last year’s Autumn Budget.
She detailed plans to charge electric car owners 3p for every mile they drive, while plug-in hybrid owners would face a cost of 1.5p, as the Government looks to claw back money lost from dwindling fuel duty receipts.
New research shows that almost two-thirds (62 per cent) of UK drivers said pay-per-mile car taxes will discourage them from making the switch to electric vehicles.
A concerning 24 per cent of people reported that the new tax burden would have a significant impact on their decision to purchase an electric vehicle in the future.
Labour recently confirmed that the measures would be going ahead with some minor changes to the running of the scheme, although the costs will remain.
Drivers will be required to record their mileage with the DVLA and provide a reading from their odometer and an estimated mileage for the coming year.
The DVLA would then calculate an estimated eVED liability, with an average motorist driving 5,000 miles a year in an EV set to pay around £150.
Many drivers have admitted that they may be put off from investing in an electric car due to pay-per-mile car taxes
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Experts have highlighted how the new taxes could have a disastrous impact on professional drivers, who could drive tens of thousands of miles a year, potentially costing them hundreds of pounds.
Simon Staton, client management director at Venson Automotive Solutions, which commissioned the research, said the negative reaction to the new tax was “hardly surprising”.
He added: “The fact that almost two-thirds of drivers say they are put off switching to an electric car because of the tax should ring alarm bells for policymakers.
“At such a crucial point where Government is trying to encourage more people to switch to electric, the introduction of eVED risks upsetting the apple cart, not just with retail buyers, but with crucial fleet stalwarts who have long been the frontrunner in the drive to electric.”
Rachel Reeves confirmed the introduction of Electric Vehicle Excise Duty in the Autumn Budget last year
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PAHe noted that businesses and fleets have led the charge when it comes to getting more electric vehicles on the road.
This is down to favourable Benefit-in-Kind tax rates, with EVs attracting a rate of four per cent, although this will rise to nine per cent in 2029/2030.
However, this is dramatically lower than the most polluting petrol and diesel vehicles, which face a rate of 37 per cent, rising to 39 per cent by the end of the decade.
Mr Staton said: “The sector is now rewarded with only a two-year window to incorporate an incredibly complex vehicle mileage reporting system into their day-to-day operations to comply with eVED.”
Motorists who drive their electric vehicles more often will face heftier charges from 2028
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VAUXHALLThe Treasury estimates that the eVED tax will raise around £1.9billion in 2030/31, but is expected to rise dramatically as more drivers invest in electric cars.
Labour has introduced the measures to offset the losses from fuel duty as the Government prepares to ban the sale of new petrol and diesel vehicles.
The Venson survey found that 46 per cent of drivers consider the tax to be unfair, while a quarter of motorists supported its introduction.
A further 26 per cent said the practical implications of the pay-per-mile tax will make claiming business travel expenses significantly more difficult.