UK Finance Minister Jeremy Hunt said the UK would reintroduce le taxes on electric carsall starting from 2025. As a result, in the UK car tax will also be paid for zero-emission cars. The decision to reintroduce the tax is part of a larger project of tax increases and spending cuts to plug a 55 billion pound hole that has “opened” in British public finances.
Despite the reinstatement of the car tax for EVs, electric vehicles they will still have lower tax rates compared to cousins equipped with an internal combustion engine, even if the Government wanted to specify that the latter will increase by one percentage point a year, for three years, starting from 2025. The United Kingdom plans to end the sale of cars equipped of only internal combustion engines by 2030 with automakers having long asked for government incentives to entice customers to buy their next EV vehicles.
There was no shortage of first protests. Ian Plummer, commercial director of AutoTrader said: “The introduction of the electric car vignette and the prospect of additional running costs, due to the high cost of energy, will not bring the public closer to electric cars, quite the contrary”. The Society of Motor Manufacturers and Traders (SMMT) echoes him, underlining how the reintroduction of the car tax for EVs “will unduly penalize not only the sales of the cars but also the partner companies operating in the automotive market and will block the introduction of new technologies”.
“We recognize that all vehicle owners have to pay their fair share of taxes, however, the measures announced by the Government today mean that buyers of electric cars, and 100% electric-powered vans, will face a significant increase in costsalso in light of the increase in raw materials and the energy needed to recharge their four wheels”. These are the words of Mike Hawes, the CEO of SMMT.
Without incentiveswith today’s difficult geopolitical situation which continues to drive up the prices of raw materials and energy, and the consequent fragile and volatile nature of the raw material supply, which is too valuable for battery production, we can assume that the adoption of electric vehicles (EV) in Great Britain could suffer a sharp decline in the next period.