Three pence: a small charge per mile for an electric vehicle, but a giant conceptual leap for Britain.
Chancellors of the exchequer have long resisted any form of road pricing as politically toxic. That may be about to change next week: Rachel Reeves, perhaps inured to being pilloried for any money-raising proposal, is expected to introduce a charge explicitly linked to how far evs drive.
The Treasury has all but confirmed some kind of charge will be announced at next week’s budget, but the details have not been revealed. According to an initial report in the Telegraph, EV drivers could from 2028 pay a supplement based on how far they had driven that year on top of their annual road tax, or vehicle excise duty (VED). That could be a self-declared estimate of distance or a check on the odometer at an MOT.
According to Department for Transport (DfT) figures, battery electric cars – with lower running costs than petrol – are used more: clocking up about 8,900 miles on average in 2024. At 3p a mile, that would bring in £267 a car from the 1.4m EVs currently on the road – about £375m a year in total.
The transport secretary, Heidi Alexander, was at pains to rule out a national road pricing scheme in the face of Commons attacks on Thursday – even though a later “clarification” made clear that the EV pay-per-mile was still on the table.
The long-term picture is a looming shortfall in motoring tax revenues, as income from fuel duty evaporates in the transition to EVs. Petrol and diesel cars effectively pay a charge linked to how far they drive – but via fuel consumption at the pump.
fuel duty of 52.95p a litre (roughly 5p a mile in average cars) will bring in £24.4bn this financial year, according to the latest forecast from the Office for Budget Duty, but the billions will dwindle away from 2030, when the ban on new pure petrol and diesel cars comes in.
The challenge is to find a fair replacement for an unsustainable system – and overcome longstanding resistance on the right to any form of road charging, bundled up in the culture wars around London’s ultra-low emission zone (Ulez) and low-traffic neighbourhoods.
# Electric car sales stall as UK drivers question cost benefits
Falling electric car sales in the UK are raising concerns that the government’s enterprising targets for phasing out petrol and diesel vehicles may be at risk. Sales of fully electric vehicles fell by 15% in March, despite an overall increase in new car registrations.
The decline is being attributed to a number of factors, including the recent abolition of the government’s purchase incentive, rising electricity prices, and concerns about the availability and reliability of public charging infrastructure.
The Society of motor Manufacturers and Traders (SMMF) argues that the removal of the £1,500 grant for EVs has disproportionately affected lower-income buyers. The SMMF also points to the example of Iceland, which introduced similar pay-per-mile schemes but maintained incentives and pricing differentials, resulting in a smaller decline in EV market share.
Consumer sentiment is also playing a role. The Electric Vehicle Association England warned the chancellor in a letter that many potential buyers remain sceptical about EVs.
For many drivers, the economic advantage of EVs is diminishing, particularly those who rely on public charging points, which are often more expensive and less accessible than home charging. Ginny Buckley, CEO of Electrifying.com, notes that for those reliant on the public charging network, running an EV can now cost more per mile than a petrol or diesel car.
Worth a look