New research from Venson Automotive Solutions reveals that 69% of UK motorists think it is fair for drivers of Electric Vehicle (EVs) to pay Vehicle Excise Duty (VED), only 18% supported this when Venson asked motorists the same question in 2022.i
As fleets contend with higher EV tax bills, the Venson survey of motorists also found that a third believe a road pricing scheme could help plug the tax revenue losses resulting from the UK’s EV transition, up 10% on 2022.
29% of motorists who support paying VED for EVs, believe the standard rate should apply from the first year of ownership. They believe EV drivers should effectively forgo the low first-year rate of vehicle tax currently set at £10, which applies to EVs registered after April 2025, and instead pay the £195 rate from day one of ownership.
Public support for taxation of EVs doesn’t stop there. From April, newly registered electric and zero-emission vehicles with a list price exceeding £40,000 are now subject to the standard road tax rate of £195, in addition to the ‘Expensive Car Supplement’[i] of £425 a year. Demonstrating further public backing for the taxation of EVs, almost half (48%) of motorists surveyed by Venson believe it is fair for EV owners paying the supplement to also be liable for standard road tax.
Meanwhile 60% believe it’s fair that new standard EV road tax is the same as the road tax on petrol and diesel cars.
As the Government seeks to address the growing shortfall in fuel duty revenue resulting from the transition to EVs, the majority of motorists surveyed by Venson think a road pricing scheme would be the best revenue-making option. Less popular schemes included a tax purely based on miles driven, utilising data collected annually at MOT (16%), a ‘pay-as-you-drive scheme utilising telematics to monitor driver behaviour and speed (15%) and a specific ‘business usage’ charge for company car and van drivers (9%).
Simon Staton, Client Management Director, Venson Automotive Solutions, comments: “Strong public support for taxing EV’s rubberstamps the sentiments of UK motorists, who clearly feel it’s only fair EV drivers contribute their share financially to improving our roads just like those driving ICE vehicles.
“However, this level-headedness from UK drivers offers little comfort for the many businesses now facing an additional £620pa tax bill on many fleet EVs. Whilst fleets have driven much of the EV transition to date, businesses are now having to grapple with these cost increases and their impact on whole-life fleet costs. This could, in turn, force fleets to reassess their fleet strategies.
“If Government wants to maintain the upward trajectory of EV sales it needs to look after fleet. Indeed, it was welcome news to hear rumour that the Government may consider raising the Expensive Car Supplement Threshold at a future fiscal event, which could help bring these costs down. In the meantime, however, businesses may well pause for thought before growing their EV fleet.”[ii]
i Independent survey of 500 motorists conducted by Quest DIY
[i] Introduced in 2017, this £425 supplement is payable from years two to six of a vehicle’s life.
[ii] https://www.autocar.co.uk/car-news/consumer/uk-government-set-raise-%C2%A340k-luxury-car-tax-threshold-evs
