In light of imminent tax changes set to take effect in April, the Labour Party is being cautioned against the proposed electric car tax hikes that could significantly deter motorists from adopting electric vehicles (EVs). This move comes as the electric vehicle market faces a contraction, with January registrations showing a 2.5 percent decline. Current statistics reveal that only 21.3 percent of new car registrations are electric, falling short of the 22 percent target for 2024. The upcoming changes, specifically the application of the Vehicle Excise Duty (VED) on electric vehicles priced over £40,000, will impose an additional £410 annual tax — ultimately adding a total cost of £2,050 over five years. With the majority of new electric cars exceeding this price threshold, experts warn that these taxes create unnecessary barriers, particularly for private and used vehicle buyers who may not be prepared for increased costs. Industry leaders emphasize the need for measures to encourage EV adoption rather than impose further financial burdens, highlighting that affordability remains a significant barrier for potential buyers.
Sat Feb 08 2025 at 9:52