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EV Grants Extended: But New Mileage Tax Looms
23 Nov
Summary
- Government to inject £1.3bn into EV subsidies until 2030.
- A new consultation on a 3p per mile tax could deter buyers.
- An additional £200m allocated for expanding charging infrastructure.
The UK government has announced a substantial £1.5 billion package to support the transition to electric vehicles (EVs). This includes an extra £1.3 billion allocated to EV subsidies, extending the grant program until 2029-2030, and a further £200 million dedicated to expanding the network of charging points across the country.
These incentives are designed to bolster the EV market, particularly as car manufacturers face mandates to increase the proportion of zero-emission vehicles sold. Despite the increased financial support for purchasing new EVs, industry experts express concern over a parallel consultation on a potential pay-per-mile tax. This proposed 3p per mile charge could add approximately £276 annually to the cost of EV ownership.
This mixed messaging, offering incentives while simultaneously proposing new taxes, has led to apprehension among EV advocates and potential buyers. Questions also remain about the VAT rate on public charging points, which is higher than domestic charging, a matter under review. The government aims to offset declining fuel duty revenues with these new measures.
