Proposals to tax electric vehicles (EV) more heavily to raise revenue lost from fuel duty will be a turn-off warns Steve Tigar, entrepreneur and CEO of loveelectric.cars, the new ethical fintech which makes low-cost electric car leasing a reality for employers and their workforce.
Steve Tigar says:
“I’m worried that by recommending the taxation of electric vehicles (EV), the Commons Transport Committee isn’t grasping the enormity of getting drivers to adopt a completely new fuel.
“Recent EV uptake has been strong but we’re still only 1% of the way to switching drivers off CO2 emitting fuels. And significant challenges remain.
“One of the great successes has been the salary sacrifice scheme with recent figures showing that 22% of cars bought through these are EVs.
“These salary sacrifice schemes, like those from loveelectric.cars, are proving increasingly popular with employees and employers because of the financial benefits they offer.
“The biggest incentive has been the current low Benefit in Kind (BiK) tax rates. These make otherwise prohibitively expensive EVs a viable alternative to petrol and diesel cars. But while low BiK rates have electrified the EV market, suddenly adding new taxes could equally pull the plug on that.
“Currently, drivers signing up for a four-year lease don’t know what tax they’ll be paying in the fourth year of their agreement. Those drivers need certainty until at least 2030.
“Of course, the government must replace the fuel duty that will be lost once the sale of new petrol and diesel vehicles comes into force in 2030. But remember, revenue won’t be lost overnight. It will dwindle gradually.
“This should give the government time to work out a proper strategy for replacing lost fuel duty, without knee-jerk taxes that risk putting the brakes on an EV market that’s only just getting going.”