Pay-per-mile tax could undermine net zero goals

As the chancellor announces plans to introduce a pay-per-mile tax for electric vehicles, experts are worried it could stall net zero goals.

John Wilmot, founder and CEO of car lease deal comparison site, LeaseLoco.com, has expressed his worry that the initiative will deter people from making the switch to electric vehicles, slowing down the government’s net zero ambitions.

Pay-per-mile tax is set to be introduced as more drivers have switched to electric vehicles over the years, bringing less revenue in from fuel duty.

Under the change, the levy is set at 3p per mile driven in an EV and 1.5p per mile driven in a PHEV. This will come into effect from April 2028.

Electric vehicle drivers have already faced rising costs over the past couple of years such as higher insurance premiums, the introduction of Vehicle Excise Duty (VED) road tax, and an increase in the cost of home charging.

Although the change isn’t to be implemented until 2028, motoring expert John Wilmot is concerned that this could deter drivers from switching to electric vehicles as the change doesn’t come with as many benefits as it once used to.

He said, “One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay-per-mile tax risks eliminating that advantage, which could make drivers think twice about switching any time soon.

“It’s almost sending mixed messages. We want people to switch to electric cars but they’re dealing with limited charging infrastructure and other rising costs which can leave them questioning whether it’s even worth it.

“A pay-per-mile tax could unfortunately slow down the progress of the government’s net zero goals.

“Lower running costs were a huge part of the incentive for going electric. Taking that away risks stalling the momentum we have built by giving people confidence in electric vehicles.

“As a leasing company, we’ve been seeing more drivers express their interests in electric options than ever before, but it’s no doubt that this could make people hesitate.

“Understandably, drivers want clarity before committing to making the switch to electric and it’s hard to have confidence when the rules and the costs keep changing.”