The growth of electric car sales in the UK slowed to its lowest point in two years after the news broke that the government was considering a pay-per-mile tax on EVs.
New data released by the Society of Motor Manufacturers and Traders (SMMT) shows that 39,965 electric cars were registered in the UK in November. Although this is an improvement of 3.6% compared with November 2024, it is also the smallest year-on-year growth in EV sales recorded for any month during the past two years. This was despite the ongoing roll-out of the Electric Car Grant (ECG) scheme, which provides a discount of up to £3750 on mainstream electric cars.
The SMMT attributed the slowdown to the government’s announcement of a pay-per-mile tax on electric car drivers from April 2028.
Reports of the levy first broke in the national press on 6 November, to widespread furore, and it was confirmed in the Budget on 26 November. Under the plans, electric car drivers will be charged 3p for each mile driven, while plug-in hybrid drivers will be made to pay 1.5p.
“Current proposals will quash demand right when it is needed to rise steeply, leaving the market even further adrift of government goals,” said the SMMT.
Mike Hawes, chief executive of the SMMT, added that the slowdown “should be seen as a wake-up call” for the government.
Sue Robinson, chief executive of retail body the National Franchised Dealers Association, said: “It seems that the Government support for the EV transition is insufficient and the positives from the Budget have been overshadowed by an EV pay per mile tax.
“In an increasingly difficult financial environment we are likely to see registrations continue to fluctuate and the pace of EV adoption determined by the measures announced last week.”
The Office for Budget Responsibility (OBR) had already warned that the new levy would come at the cost of some 440,000 EV sales between now and March 2031. It said “the new charge is likely to reduce demand for electric cars, as it increases their lifetime cost”.
Although the pay-per-mile tax – and the effect it has had on public perception of EV ownership – is likely to continue hampering sales, that is offset somewhat by the extension of support for the ECG. Funding for the scheme was bolstered by a further £1.3 billion in the budget, which the OBR said would generate 320,000 more sales.
However, but that still leaves a gulf of 120,000 cars left by the introduction of the pay-per-mile levy.
Add your comment