The UK boss of Ford has warned the Chancellor that the Government risks setting back mass adoption of electric vehicles with planned car tax changes in the Budget next week.
Chancellor Rachel Reeves is expected to introduce pay-per-mile car taxes in the Budget on November 26 in a bid to raise money for the cash-strapped Government.
Reports suggest that the Chancellor will look to launch the new taxes on electric vehicles from 2028, as revenue from fuel duty begins to fall as more drivers ditch petrol and diesel cars.
While the Treasury has not confirmed that any changes will be announced next week, it acknowledged that a “fairer system” is needed for motorists.
The proposed three pence per mile levy has been widely criticised by the motoring industry, with many warning that it is unfair for the drivers who switched to EVs for the lower running costs.
Estimates suggest that the average electric car owner could face an additional charge of around £300 a year, in addition to Vehicle Excise Duty costs.
Commenting ahead of the Budget, Lisa Brankin, managing director of Ford UK, said the Chancellor risks putting drivers off from making the switch to an electric car.
Speaking to the BBC’s Big Boss Interview podcast, she said: “It’s certainly not the right time to do it.
The boss of Ford has issued a warning to Rachel Reeves ahead of the Budget next week
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FORD/PA
“That [policy], in the face of really fragile demand for electric vehicles, is just another brake.
“It’s really easy to sell people things they want. It’s hard to sell people things they don’t want.”
Ford is one of only two brands to benefit from the Government’s £3,750 Electric Car Grant, with its E-Tourneo Courier and Puma Gen-E models.
Ms Brankin has been supportive of Labour’s £650million incentive scheme, saying that she was “proud” that Ford had been recognised for its commitment to sustainability.
The Ford Puma Gen-E is already one of the most popular electric cars, with the hybrid variant being the best-selling vehicle in the UK.
In addition to being the best-selling vehicle in 2024, Ford has sold almost 46,000 models this year, according to data from the Society of Motor Manufacturers and Traders (SMMT).
While the incentives have already helped more than 20,000 people switch to an electric car, Ms Brankin has warned that any tax changes in the Budget could slow down progress.
Under the terms of the Zero Emission Vehicle mandate, all manufacturers must have a certain percentage of sales come from electric vehicles. There is a 28 per cent target this year, while brands must reach 80 per cent by 2030.
Ford boss Lisa Brankin has warned that the Government risks stalling EV adoption
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FORD
Ford’s boss said that Ford would not be able to reach the 80 per cent target without Government help, with brands potentially fined if they do not sell enough EVs.
She noted that the targets were first introduced at a time when the EV market looked “buoyant”, although “customer demand is not in line with that ambition” in 2025.
A Government spokesperson said: “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles.
“Just as it is right to seek a tax system that fairly funds roads, infrastructure and public services, we will look at further support measures to make owning electric vehicles more convenient and more affordable.”