Jeremy Hunt imposes VED on electric cars in major blow for EV owners

RAC head of policy Nicholas Lyes said: “After many years of paying no car tax at all, it’s probably fair the Government gets owners of electric vehicles to start contributing to the upkeep of major roads from 2025.

“While vehicle excise duty rates are unlikely to be a defining reason for vehicle choice, we believe a first-year zero-VED rate benefit should have been retained as a partial incentive.

“But we don’t expect this tax change to have much of an effect on dampening the demand for electric vehicles given the many other cost benefits of running one.

“The fact that company car tax increases on EVs will be kept low should also keep giving fleets the confidence to go electric, which is vital for increasing the overall number of EVs on our roads.”

However, Steve Nash, CEO of the Institute of the Motor Industry, previously warned that the Government’s introduction of VED on electric cars could harm the sale of EVs in the UK.

He said earlier this week: “The news reported that the Treasury plans to add vehicle excise duty to electric cars is not surprising to most in the industry – albeit it seems slightly counter-intuitive to the Government’s goal of reducing particulates.

“Clearly the reduction in revenues from road tax on Internal Combustion Engine (ICE) vehicles is a concern for Government.

“But we really hope that Jeremy Hunt doesn’t just see the addition of duty on electric vehicles as a means to generate income for Government coffers generally.”

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