Experts are warning that new car tax changes being introduced within weeks could have a disastrous impact on the uptake of people choosing electric vehicles over petrol and diesel models.
From the new financial year on April 1, new Vehicle Excise Duty (VED) changes will be introduced which will see rates raised in line with inflation.
It will also be the first time that electric vehicles are required to pay car tax following a decision by former Chancellor Jeremy Hunt in 2022.
Speaking during the Autumn Statement, the Conservative MP said the system of vehicle taxation should be fair for all motorists, no matter what car they drive.
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An expert called on the Government to remove the Expensive Car Supplement for electric vehicles
DVLAThe likes of the Department for Transport and the DVLA have been reminding drivers of the incoming changes on social media for months to ensure they tax their vehicles properly.
However, experts have warned that the new tax could result in the number of new electric vehicles on the road falling as drivers are scared away from paying even more tax.
January was a bumper month for electric vehicles with data from New AutoMotive showing that more than one in five new cars were electric, resulting in the highest-ever January share for the fuel type.
Electric vehicle sales grew by 34 per cent compared with last year, when just 15 per cent were electric. The sales of petrol and diesel vehicles also fall as drivers move to zero emission vehicles.
Despite this, Paul Barker, editor of Auto Express, warned the new car tax changes being introduced for electric vehicles in April could put some drivers off from transitioning.
He said: "From April, electric cars costing more than £40,000 (the current limit for VED) - which is around 70 per cent of new EVs - will lose their current exemption from the expensive car 'road tax' supplement, adding £410 to their annual VED rate for the first five years, which is a £2,050 additional hit."
Barker added that the tax wouldn't just impact buyers of new electric vehicles, but also those who are looking to buy used EVs.
The expert noted: "Regardless of the price paid for a used EV, the car will be liable if it was originally bought for more than £40,000."
Data suggests that just three per cent of electric vehicles on the market in the UK are under £30,000, meaning many vehicles will be expected to pay extra because of the Expensive Car Supplement.
During the most recent Budget, Rachel Reeves stated that the Government recognised how the ECS "disproportionately impacts" those looking to buy an electric vehicle.
However, the Government ruled out making any changes to the ECS at present, although it said any amendments to the scheme would only be made at a future spending review.
With the Spring Statement set to take place on March 26, experts will continue to call on the Chancellor to commit to changes to help drivers switch to an EV without extra charges.
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Only three per cent of electric vehicles on the UK market are under £30,000
PABarker warned that the state of the private new and used electric vehicle market cannot handle the Government adding extra cost barriers as drivers may instead opt for a petrol or diesel car.
He then called on the Government to "rethink this punitive tax" and to consider adding incentives to help motorists make the switch.
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