Drivers are reconsidering their commitment to electric vehicles (EVs) after Rachel Reeves confirmed a new pay-per-mile tax that will cost EV owners approximately £240 per year for average mileage. Traffic and road experts have warned that the Labour Party government's move could deter people from choosing eco-friendly vehicles.
New Tax Details
The electric vehicle excise duty (eVED) will be set at a rate of 3 pence per mile. For drivers covering the average 8,000 miles per year, this equates to £240 annually. Carwow analyzed the figures, highlighting the financial impact on EV owners.
Industry Reaction
John Wilmot, founder and chief executive of car lease comparison platform LeaseLoco.com, expressed concern: "One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay-per-mile tax risks eliminating that advantage, which could make drivers think twice about switching any time soon. It's almost sending mixed messages."
He added: "We want people to switch to electric cars, but they're dealing with limited charging infrastructure and other rising costs, which can leave them questioning whether it's even worth it. A pay-per-mile tax could, unfortunately, slow down the progress of the government's net-zero goals."
Wilmot emphasized that lower running costs were a major incentive for going electric. "Taking that away risks stalling the momentum we have built by giving people confidence in electric vehicles. As a leasing company, we've been seeing more drivers express their interests in electric options than ever before, but there's no doubt that this could make people hesitate."
He concluded: "Understandably, drivers want clarity before committing to making the switch to electric and it's hard to have confidence when the rules and the costs keep changing."
Comparative Analysis
Carwow notes that despite the new tax, EV drivers still benefit financially compared to petrol car owners. The experts explain: "That’s still around half of what the average petrol car driver would pay in fuel duty for the same mileage, so electric car drivers still come out of this better off."
