Transparency and clarity needed urgently for road tax on electric cars

Marc Palmer, Head of Strategy and Insights commented:

"Road tax on cars provides a substantial income to the Treasury and electric vehicles (EVs) are cars after all, but it's too soon to start taxing them at a time when consumer demand for electric vehicles is struggling. What we need now are more supportive reasons for people to make the switch, not more negative reasons for them not to. As EVs become more popular and there are fewer petrol and diesel cars on the road the Treasury will of course need to find ways to recover the drop in fuel duty, but with the new Government in place it's the perfect time for them to reaffirm the UK's commitment to the EV transition and announce positive measures.

"Sales growth of new EVs has slowed over the past couple of years, with fleet channels leading the way because there are still incentives at play. Benefit in Kind and salary sacrifice schemes provide attractive, tax efficient means to make the switch and help drivers realise the obvious cost saving and environmental benefits of electric cars. New EVs have a compelling total cost of ownership proposition, and we know that when they're priced competitively, they sell. The same principle can be applied to used EVs, as the market matures and more cars are available to consumers at varying price points, interest is there to make the switch.

"Given that the total cost of ownership is such a key benefit to driving an EV, adding further costs - however small - sends a negative message. Our data suggests that a healthy 34% of consumers are considering an electric vehicle for their next car, but they need reasons to commit to an EV rather than reasons to buy another petrol or diesel car.

"Ultimately, we'd like to see the new Labour Government do more to support the transition to greener vehicles. That means protecting the existing salary sacrifice and BIK incentives to support the new electric car market, and offering targeted financial incentives on used electric cars to support greater adoption. We also need to be proactive and transparent about future changes in road pricing and taxes for electric cars so consumers can plan accordingly, as well as supporting the industry to install more chargers by speeding up planning and encouraging more creative ways to charge EVs near people's homes."