U.K.-based online auto marketplace CarWow has criticized the government’s plan to end the exemption of electric vehicles (EVs) from vehicle excise duty, which is better known as road tax.

The comments were made ahead of the U.K. government’s Autumn statement on November 17, which detailed key tax and spending plans for the U.K. over the next few years. The exemption of EVs from road tax was part of a strategy to encourage drivers to switch to EVs before a ban on the sale of new petrol and diesel cars comes into force in the U.K. in 2030.

Plans to impose the tax on EVs had been widely expected ahead and were duly announced by Chancellor Jeremy Hunt. The change will apply from 2025. However, tax rates on company cars will remain lower for EVs. Critics argue that anything that raises the cost of owning an EV will slow the transition from petrol and diesel to EVs.

Hunt said that the Office for Budget Responsibility had forecast that EVs would account for half of new car sales by 2025 and added that the change would make the system “fairer.”

Other industry figures also criticized the decision. Auto Trader described the move as “unhelpful,” warning that it “will drive more would-be buyers away from EVs when other incentives are being scrapped and high energy bills are eroding the advantages of going electric.”

CarWow’s consumer editor, Hugo Griffiths, told Car Dealer Magazine “Fundamentally, there remains a much more expensive elephant in the room: Road tax brings in a mere £7 billion ($8.3 billion U.S.) to government coffers each year, whereas duty from petrol and diesel raises four times that amount.”

“With just seven years to go until the ban on the sale of new petrol and diesel cars begins, the government must stop burying its head in the sand, treat its citizens like adults and explain precisely how it intends to raise £28 billion ($33.1 billion U.S.) each year once fuel duty revenue dries up.”

“Tweaks to the current system aren’t going to cut it. Sweeping changes, which EVs require, need years to plan for and require deep collaboration from the outset. The Treasury needs to be bold, brave and honest, and clearly set out an equitable plan for the future of road tax that works for everyone.”

One alternative option to the current road tax system is a road pricing scheme based on telematics, an option that is supported by the Transport Select Committee. However, Griffiths said: “Telematics devices are already commonplace for young drivers with ‘black box’ insurance policies, but for the government to electronically track motorists’ individual journeys as they go about their daily lives brings with it serious concerns over privacy rights.”

“This is clearly going to be a difficult conversation to have — but it’s not going to get any easier as we near 2030.”

 

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