Budget 2025 – what will it mean for driving electric?

The introduction of a new electric VED tax in only two years is like putting the brakes on any momentum we have been building.

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We all love our electric vehicles (EVs). 95% of us would recommend them to friends and family; and two thirds of us believe our general experience of driving electric (and using the public charging network) is improving.

However, we are in a situation where only 5% of cars on the road are electric; where half of those without driveways are paying more to run their EVs than their old petrol and diesel cars; and where nearly 40% of drivers believe electric will never work for them.

So, while we welcome the fact that the Budget recognised the need for more support to make the transition to EVs a success, the parallel introduction of a new electric Vehicle Excise Duty (VED) tax in only two years is like putting the brakes on any momentum we have been building to get more and more drivers to switch to electric.

Plus, it is adding extra cost to those reliant on public charging and already paying more to drive an EV – and let’s be clear, that is already a huge disincentive to switch to electric.

Those households without a driveway currently make up less than 10% of the EV driving population but almost 40% of the full driving population.

No-one is suggesting that the discussion of how to make EV drivers pay their way in the future shouldn’t happen, and many of our members believe it is the right thing to do.

But many also believe this is the wrong time to introduce such a scheme.

It is therefore now vital that the driver’s voice is central to discussions around how any eVED scheme will be introduced and monitored.

And it is critical that the support package around it genuinely tackles the biggest barriers preventing more people from switching to electric: the charging divide between those who have driveway and those who do not; and the fact that incentives targeted at the new car market alone will not help the majority of households overcome the still significant upfront costs of buying an EV.

The £1.3bn top up to the Electric Car Grant announced yesterday needs to support lower income households to access EVs, and help boost the used EV market; benefit in kind rates need to be extended beyond 2030 and to the used market; and the public charging review needs to move swiftly to take concrete steps to bring down the costs of charging, particularly for those without driveways.

These are the points we will be making as we continue our discussions with HM Treasury and the Department for Transport in the coming weeks.

Vicky Edmonds is CEO at EVA England

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