More than half against road pricing plan for electric vehicles

Proposals to make electric vehicle (EV) drivers pay six pence per mile (ppm) have been given the thumbs down, according to new research from Startline.

More than half (55%) of respondents to a survey were against the new tax plan, while two-in-five (40%) say that EV tax should be kept low by the Government in order to encourage take-up.

Perhaps unsurprisingly, more than one-five (22%) did not like the idea of road pricing for any vehicle.

A new ‘road duty’ for EVs – levied at around 6ppm (plus VAT) – was recommended by the think tank the Resolution Foundation last month, to offset a decline in fuel duty.

It is urgently calling for the tax change in a report - Where the rubber hits the road – to plug the predicted shortfall in road taxes from the switch away from internal combustion engine (ICE) vehicles to electric.    

Efforts to tackle climate change by transitioning away from fossil fuels are “rapidly eroding” the £39 billion the Government currently receives in tax revenues from petrol and diesel vehicles, according to the Office for Budget Responsibility (OBR). 

The Treasury is expected to collect £24.3bn in fuel duty this tax year (2023/24), but the increased take-up of EVs is expected to cost £13bn a year in lost fuel duty by 2030, it says.

Paul Burgess, CEO at Startline Motor Finance, said: “It looks like there are really two key messages here from those who took part in our research.

“One is that people think EV taxation should be kept low in order to encourage more people into electric cars, and the second is that road pricing is not the preferred method to recoup lost tax.

“However, it also looks as though there is quite a lot of resistance to the idea of road pricing in general, which could give politicians and other bodies with an interest in how cars are taxed something to mull over.

“It has long been widely assumed that the UK will move over time to a pence-per-mile model for tax but it may be something that voters just don’t like.”

Just 10% of people in the Startline Used Car Tracker research agree that EV drivers should pay the same as petrol and diesel, and just 9% that the six pence per mile figure is the right way for Government to make up the tax shortfall.

Burgess continued: “These are very low percentages and underline the extreme lack of enthusiasm for the Resolution Foundation’s ideas.

“It could be that legislators need to go back to the drawing board and identify new ways of taxing EVs that have more voter appeal.”

The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research. This time, 319 consumers and 50 dealers were questioned.