New EV tax would put drivers off switching

Two-thirds of Northern Ireland drivers have said a planned new tax on electric vehicles (EVs) would put them off switching from petrol and diesel cars.

Announced in this week’s Budget, the new measure will see EV owners hit with a 3p per mile charge – meaning a driver with an average annual mileage of 7,000 miles could face an extra £210 in tax each year.

Motorists who own petrol or diesel vehicles pay a tax when they buy fuel, while EV owners have so far escaped fuel levies, saving them an average of £600 a year.** But as more drivers transition to EVs and the gap in fuel duty revenue widens, the UK Government is seeking new ways to plug the shortfall.

However, some motoring and industry groups fear the new tax could deter drivers from making the transition and lead to a slowdown in EV uptake.

A survey by car insurance experts at CompareNI.com found that 67 per cent of drivers here would be reluctant to switch to EVs if the planned levy was to go ahead.

The poll of 800 NI motorists also found that 60% of respondents were not in favour of the pay-per-mile charge, suggesting the majority of drivers believe the Treasury should find other ways to fill the hole in public finances.

While the government plans to ban the sale of new petrol or diesel cars by 2030, 80% of people surveyed by CompareNI.com said they wouldn’t want to change to electric vehicles if there wasn’t a pending ban.

Furthermore, 81% of respondents said they believed Northern Ireland is not ready for electric vehicles.

Ian Wilson, car insurance expert and Managing Director at CompareNI.com said: “EVs are quickly becoming more mainstream, with drivers increasingly aware of the potential long-term savings they can offer due to lower running costs.

“However, as some EV campaigners have rightly pointed out, this pay-per-mile tax could discourage drivers who are on the fence about going electric and may lead to them sticking with their petrol or diesel model for a few more years.

“Although there are several advantages to switching to an electric vehicle, many people are still understandably hesitant to make the change. One of the biggest stumbling blocks for many drivers is range anxiety. While Northern Ireland’s charging point infrastructure has come a long way, the network still lags behind the rest of the UK.

“The initial upfront cost of the vehicle is another key barrier to wider EV adoption. With the high cost of living continuing to squeeze household budgets, it is not surprising that most drivers in Northern Ireland remain sceptical about moving to EV ownership, with many putting it off for as long as they possibly can.”

As a price comparison site, CompareNI.com helps drivers find savings on petrol and electric car insurance.

References:

*https://www.gov.uk/government/statistical-data-sets/vehicle-licensing-statistics-data-tables#all-vehicles

**https://www.electriccarscheme.com/blog/how-much-does-it-cost-to-run-an-electric-car?ref=https%3A%2F%2Fwww.google.com%2F