UK Report Advocates EV Tax Reforms

A report by New AutoMotive claims radical tax reform is unnecessary to facilitate the UK's transition to electric vehicles (EVs), advocating for a shift in road tax to be based on vehicle efficiency rather than a flat rate. This approach aims to alleviate the current disparity where cleaner cars incur higher taxes than older, polluting vehicles. The report warns against implementing pay-per-mile road pricing, which has led to a decline in EV sales in other countries, and suggests that modest fuel duty increases are sufficient to maintain contributions from petrol and diesel drivers. In contrast, a recent government decision has reduced EV road tax discounts, citing errors in weight calculations and unexpectedly high EV sales. Additionally, in Australia, discussions are ongoing about potentially introducing road user charges for EVs to offset declining fuel excise revenues. These developments reflect a broader trend of balancing tax policies as EV adoption rises while addressing fiscal impacts.