Electric car grants extended but pay-per-mile on cards for EV drivers

Will electric-car drivers lose out, or win concessions in Wednesday’s Budget? The expansion of existing incentives, investment in making it easier to charge and potential alterations to the way EVs are taxed are already on the table, according to a mixture of Government press releases and leaks. So what do we know so far?
Following the launch of the Electric Car Grant in July the government says it has already helped 35,000 people buy an electric car by providing a discount of up to £3,750 on selected models. Initially £650m was set aside for the scheme, yet recent reports suggest there could be an additional £1.3bn made available. This is positive news as the list of vehicles eligible vehicles continues to grow with around 40 models now qualifying for a discount. Last week the UK-built Nissan Leaf was the latest EV to be added to the list. The Leaf will receive the maximum £3,750 grant making it one of only four vehicles to qualify for the Level 1 grant, while the remaining eligible EVs get a smaller £1,500 discount.

The Government is also expected to provide £200m in funding to help increase the number of charging points. This is in addition to £400m already pledged to support the expansion of the public charging network and to help local authorities improve on-street charging infrastructure. There is also expected to be the announcement of a consultation which aims to improve access to charging for those without off-street parking. This is in addition to the previously promised £25m scheme to support councils provide cross-pavement charging for those without a driveway. On top of this, we hope to hear news of a review of public charging costs which are currently significantly higher than charging at home.

This all sounds promising for electric-car owners, yet the announcement of a pay-per-mile tax on electric cars has been strongly hinted at. Such a tax would be calculated on a driver’s estimated annual mileage: if the driver then covered a lower mileage, the extra money would carry forward to the following year; if they covered more miles than anticipated, they would eb charged for the shortfall. The charge could be 3p per mile, on top of the other taxes which already apply. Changes earlier this year mean EVs already pay the basic rate of VED (or “road tax”), plus an additional ‘Expensive Car Supplement’ for the first five years after registration if they cost over £40,000 when new. If this pay-per-mile tax is introduced, it could add several hundred pounds to the total cost of running an electric car.
Watch this space for all the latest coverage of the Budget’s impacts on drivers.