The biggest loser from the UK government's expected introduction of ‘pay-per-mile’ road pricing as a way of taxing electric vehicles will ultimately be the government itself.
While in the short term it is very much car makers that need a rapid acceleration in EV sales (as they are on the hook for fines for missing sales targets set out in the government’s ZEV mandate), in the long term it is the government that will face legal action if it fails in its pledge for the UK to be net-zero by 2050.
This is what all of its EV policies are ultimately tied into. The UK committed to be net-zero for carbon emissions by 2050, and it introduced a ban on the sale of non-electric vehicles by 2035 as part of that. Given cars tend to stay on the road for around 15 years in the UK, the theory is the UK car parc will be largely EV by 2050, and cars will have done their bit in reducing emissions for the government in its legally binding net-zero pledge.
Chancellor Rachel Reeves’ latest taxation policy would be, if introduced, the latest in a series of contradictory head-scratchers from successive governments in their approaches to EVs.
This will hurt still fragile consumer confidence in EVs and risks undermining their continued uptake. Putting any notion of the fairness or cost of the tax aside, simply having the additional tax in place is a barrier to their adoption and gives hesitant prospective EV buyers another reason to delay the switch the government needs them to make.
All of this comes at a time when EV uptake is increasing, following the government's introduction of the Electric Car Grant (ECG), which gives up to £3750 off the price of qualifying EVs. Last month, the market share of EVs increased by almost five percentage points year on year to 25.4% – a figure that, with various credits and small print in the ZEV mandate scheme, will put the industry on track for compliance.
Next year, the market share needs to be at 33%, so momentum needs to be maintained – but road pricing will hit consumer confidence, causing future crashes.
Join the debate
Add your comment
Serious question, who will actually bring legal action against the Government? What will any penalties be, and if financial, won't that just be more money for the taxpayer to stump up?
Whilst I agree this risks the uptake of EV's....in reality, did EV buyers really believe that they would be able to drive/park/charge for free....or even Tax free.
The successive greedy governments are dialled into crazy fuel taxes (even taxes on taxes), and are not likely to try to find economies in the way that they operate to wean themselves off this tax take. God forbid they would look at ways to be less wasteful first.
Cant see many people queuing up to retrospectively fit mileage measuring software at huge expense (like turkeys voting for Christmas!). This would have reliability issues for sure, and thats before we even discuss GDPR and private data.
Lets face it. You cant trust any government dept. with your data security.
The reality is that the tax shortfall to the exchequer will have to be addressed. The problem is that as there is no proportionate tax on the CO2 emissions from ICE cars and that EV's are only broadly equivalent in running cost to ICE vehicles due to current taxation arrangements. The obvious answer is to remove fixed cost taxation on all vehicles (Road Tax) and replace it with a variable rate dependant on the real total cost of operation, including while life emissions, road space and other factors. The challenge is in implementation, a lot of telemetry will be needed, but the benefit would be in more responsible driving decisions and better use of public and personal transport options.