UK EV drivers are likely to see a sharp increase in road tax with new announcements from Rachel Reeves.
Research from GAP insurance experts, ALA has uncovered that the future average pay-per-mile will set the average driver back £267 a year, plus an additional £200 in standard road tax, increasing from April.
Luxury car drivers with an EV over £50,000 will also be subject to an additional £425 for the privilege of owning a more expensive vehicle. This takes the annual bill up to £892, a concerning annual bill.
These latest announcements have seen a stumble in electric car sales, remaining stagnant year-on-year compared to the rest of the market, which increased by 3.2%, according to the latest SMMT figures.
Simon England, founder of ALA Insurance, commented, “Drivers are being encouraged to switch to electric cars ahead of the 2030 ban on ICE vehicles but financial incentives are quickly disappearing. If EV drivers are expected to pay the same, or more, than petrol and diesel drivers, then that’s a legitimate barrier that will deter thousands of road users from switching.”
“The rise in EV adoption will leave quite a gap in the government’s revenue from road tax, but raising taxes for electric cars is definitely off-putting to people considering a switch, especially when they won’t have a choice from 2030, as it stands,” he explained.
“The minimal increase in the luxury vehicle tax for EVs makes a slight difference for high-value EVs but doesn’t support the everyday driver.”
He adds, “This does seem to be impacting EV sales, however, with the increasing price of fuel, it’ll be interesting to see how adoption changes in the future.
“Further incentivising electric cars would have been far more beneficial, allowing consumers to switch before being forced to,” he said. “Trade-in support or stronger part-exchange offers would help accelerate adoption without disproportionately impacting drivers unable to switch immediately.”
