Chancellor Rachel Reeves has been urged to abandon her controversial pay-per-mile tax plan for electric vehicles, with motoring experts warning the charge could backfire on the UK's transition to cleaner transport. The new tax, confirmed to take effect from 2028, would see electric vehicles (EVs) charged 3p per mile and hybrids 1.5p per mile. However, electric car campaign group EVA England has called for the electric Vehicle Excise Duty (eVED) fee to be axed, citing significant risks.
EVA England's Open Letter Highlights Concerns
In an open letter addressed to Transport Secretary Heidi Alexander, EVA England outlined fears that the new charge could “undermine confidence” in electric vehicles, potentially deterring buyers. The letter stated: “Our report also raises our continued serious concerns about the proposed introduction of electric Vehicle Excise Duty and any future pay-per-mile model at such a sensitive moment in the transition. With only 5.5% of the total car parc electric, British consumers currently being extremely price-sensitive, and 40% still EV sceptical, now is not the right time to introduce an additional tax that many drivers see as an EV-only tax. It risks undermining confidence just when we need to focus on making sure more drivers are beginning to see EVs as a viable, practical option.”
OBR Warning on Sales Impact
The Office for Budget Responsibility (OBR) has previously warned that Reeves' new tax could lead to 440,000 fewer electric vehicles being sold. This is not the first time the Chancellor has faced pressure to alter the pay-per-mile fee since it was announced in the Autumn Budget last year.
Industry Pushback
The Society of Motor Manufacturers and Traders (SMMT), which represents the UK car industry, has also criticised the timing of the tax. The SMMT said: “We recognise the need for a new approach to motoring taxes but at such a pivotal moment in the UK's EV transition, this would be entirely the wrong measure at the wrong time. Introducing such a complex, costly regime that targets the very vehicles manufacturers are challenged to sell would be a strategic mistake.”
The Express has contacted the Treasury for comment.
