Labour Party Chancellor Rachel Reeves is under pressure to reconsider a proposed £300 annual charge targeting drivers who cover 10,000 miles a year in electric vehicles (EVs). The controversial pay-per-mile car tax, confirmed in last year’s Autumn Statement, aims to introduce an electric Vehicle Excise Duty (eVED) starting in 2028.
Electric vehicle advocates, including EVA England, have voiced strong opposition to the new tax. They warn that such a charge could deter motorists from adopting EVs, undermining the nation’s transition to cleaner transportation. An open letter addressed to the government highlights concerns about the timing and impact of this policy, noting that with just 5.5% of UK cars being electric and 40% of consumers still skeptical, introducing an additional tax exclusively on EVs risks harming confidence at a crucial stage.
The proposed pay-per-mile fee would charge drivers 3p for every mile driven, translating to approximately £300 annually for those covering 10,000 miles. The Society of Motor Manufacturers and Traders (SMMT) also criticized the plan, describing it as a costly and complicated measure that could stifle the growth of EV sales during a critical period.
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In response, the Department for Transport defended the policy, emphasizing the government’s commitment to supporting the EV transition. They highlighted current incentives such as savings up to £3,750 on new EV purchases and investments exceeding £3 billion in UK manufacturing and charging infrastructure. The department pointed out that while petrol drivers currently pay about £480 annually in fuel duty, EV drivers pay none, and under the new plan, EV drivers would still pay only half the duty of petrol car drivers, maintaining EVs as a more affordable and environmentally friendly choice.