Car tax changes may become ‘giant own goal’ for the Government’s electric car boost – why?
Jacob Rees-Mogg meets with electric car campaigner
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Ian Plummer, spokesperson for AutoTrader said the transition to electric vehicles will “create a big hole” in finances. He said a switch to a pay per mile road pricing strategy may be a “long term solution” but could turn into another “flip flop fiasco” if it’s not handled correctly.
The Treasury has previously warned the switch to electric models would create around a £40billion black hole in public finances.
This would be down to a loss of fuel duty and traditional Vehicle Excise Duty (VED) on petrol and diesel vehicles.
He said: “Taxes on motoring generate about five percent of government revenue, and the majority of that comes from fuel duty.
“Plainly the transition to EVs will create a big hole in public finances.
“Road pricing may be part of a long term solution, but if it’s introduced too early or without exemptions for EVs it will be a giant own goal.
“We can’t afford another flip flop fiasco like the one we had with diesel incentives.
“While opinions about the required number of charging points vary from 10 times more than we have today to nearly 100 times, it’s clear that more investment and government support will be required to ensure that charging your car is as easy as refuelling.
“People need to have confidence that those solutions exist – or are definitely on the way – before they purchase, which means that investment needs to be supply led.”
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AutoTrader said in the absence of advantages in the upfront costs for electric models, running costs are one of the main incentives.
For every 1,000 miles driven, a motorist will save around £100 in fuel costs.
However, AutoTrader warns the cost argument will only “stack up” if electric vehicles continue to be cheaper.
They warned this could be “undermined” if road pricing was introduced in exchange for fuel duty.
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