Nearly a third of EV buyers would already be happy to pay road tax, as 2030 ban on new petrol and diesel models looms closer

This is the latest report in a series of weekly updates for industry colleagues from Rachael Prasher, managing director of What Car? and Haymarket Automotive. Quoted poll data is from more than 1100 whatcar.com users.

The latest Government Budget confirmed a continued freeze on fuel duty, as well as promising further investment in the UK’s road infrastructure. No mention was made of Vehicle Excise Duty – a subject also ignored by the Government’s latest Net Zero policies. With Electric Vehicles exempt from the annual charge, it is only a matter of time before significant changes are needed as the UK’s electric vehicle registrations accelerate and the 2030 ban on the sale of new petrol and diesel cars approaches.

Our latest industry research, based on responses from 2173 in-market buyers, reveals that 56% of drivers believe fully electric vehicles should attract road tax. The respondents included EV buyers, 29% of whom believe EVs should already attract some kind of tax bill. One of the key selling points for EVs has been the tax-free VED status that comes with their zero tailpipe emissions.

Of the 44% of respondents who believe EVs should remain tax exempt for now, 40% want them to be taxed by 2030 (when the ban on the sale of new petrol and diesel vehicles arrives), while 10% want them taxed by 2025.

Vehicle Excise Duty will need to be reformed for electric vehicles because the current tailpipe-CO2 g/km framework is untenable for zero emissions vehicles. A flat annual tax on all electric cars, to be equal across all makes, was the most popular option among in-market buyers surveyed, with 39% in favour, while 26% would like to see a road charging system where users are charged per mile driven. A progressive annual tax based on a vehicle’s list price was favoured by 18% of in-market buyers.

Road charging would likely result in drivers reducing their mileage, with 38% stating that they would reduce their vehicle use if road charging replaced VED.

The research also found that 40% of respondents were in favour of taxing existing petrol and diesel vehicles more heavily after 2030. However, just 12% of those looking to purchase a petrol or diesel model as their next vehicle supported the initiative.

The Government will need to address the growing hole in the Treasury balance sheet in the future. Although no announcement has been made yet, any plans made will likely help EV sales in the short run, with buyers seeking to purchase tax-exempt models before any new legislation is passed.

For further insight from whatcar.com’s unique website data, please contact claire.groves@haymarket.com