In a move that some say "dims the switch," electric car owners will no longer be exempt from Vehicle Excise Dutyin the WUK. The change will take place in April 2025 - after half of all new vehicles are forecasted to be electric.
The change was announced as part of Jeremy Hunt's Autumn Statement, and is likely to impact more than 500,000 electric car owners, according to the RAC. Electric vehicles have so far been exempt from the road tax as it has previously been based on their carbon emissions.
The AA president has warned the move could reduce the incentive to switch to an electric vehicle. However, the RAC calls the move "fair" and does not believe that it will turn away potential buyers.
Jeremy Hunt told MPs: "Because the [Office for Budget Responsibility] forecasts half of all new vehicles will be electric by 2025, to make our motoring tax system fairer I've decided that from then, electric vehicles will no longer be exempt from vehicle excise duty."
Responding to this on Twitter, AA president Edmond King wrote: "Chancellor dims the switch to EVs with new taxation."
RAC head of policy Nicholas Lyes said: "After many years of paying no car tax at all, it’s probably fair the Government gets owners of electric vehicles to start contributing to the upkeep of major roads from 2025.
"Vehicle excise duty rates are unlikely to be a defining reason for vehicle choice, so we don’t expect this tax change to have much of an effect on dampening the demand for electric vehicles given the many other cost benefits of running one.
"The fact that company car tax increases on EVs will be kept low should also keep giving fleets the confidence to go electric which is vital for increasing the overall number of EVs on our roads. We estimate around 550,000 battery electric vehicles on the road now will be affected by the tax change in 2025, in addition to those that will be newly registered between now and then."
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