Will the new EV per-mile tax change your purchasing plans?

Goudy

There are some options on the poll I think are missing but in regards to incentivising EV ownership, the governments stance has unsurprisingly changing.

Yes they are still offering grants towards the sale of new EV's for now but their mid to long term strategy is to replace the lost revenue from fuel duty as ownership continues to swing towards more EV's. The more that do, the less incentives will be offered.

Basically this and the previous government offered owners a carrot to shift from fossil fuels.
Now we have a carrot, but it's not going to taste nice for long but it's it's still better than drinking petrol or diesel.
Eventually there's the stick as all that is available to buy new are EV's, so there is no need for incentives to shift.

I have written it before, there is a somewhat small proportion that will feel like they are losing out.
(you might feel this is actually quite large, but in the grand scheme of what's to come, learn to drive and buy a car. Those that have already shifted are a tiny amount)

For those that have already shifted, I can't truly believe they did that not wonder what the government would do to replace all the fuel duty (and at the time VED), but well done, you dodged a bullet for a good while.

The next in line, those about to swift (whether they want to or not) will still see a small benefit for a while before the government increase charging to totally replace lost revenue from fuel duty and perhaps a bit more.

Yes, they is probably going to be a small hiccup in the sales of new and used while people digest the governments plans and they get them rolling but the options on powertrains in new cars will be limited to basically one at some point, but I don't think that is where the main issue will be. 
There is far more to the EV industry than buying and running one.

I have a sneaking feeling that the government might be tempted to load this new EV charge a bit at some point, in the same way as they have done in the past on electricity bills to pay for green projects, generation and infrastructure.

It's no secret the charging network needs to increase massively and new ways to charge up an EV will need money to get off the ground, plus electricity demand will increase and that's going to need lots and lots of investment.
It's almost certain the government will incentivise that with our money rather than let the industry pay for it, it's what they usually, sorry, always do.

It's also going to lead to competition in the market which should be good if controlled properly but as we've seen in the main electricity market, some companies are going to struggle and others fail and the possibility of chargers being switched on and off like light bulbs isn't appealing to anyone.
So more money will be thrown at it that has to come from somewhere.

The carrot that was once dangled in front of potential owners will shift to other areas within the industry and all the changes are going to have to be paid for by vehicle owners in one way or another.
How they balance all this we're going to find out soon enough.

sheenas

Grumpy_chap said:

born_again said:

something has to replace the annual £25 Billion fuel duty rakes in..

I am asking out of interest (because I genuinely do not know), if fuel duty currently generates £25 Billion, what is the most it has generated?  Did the amount raised via this process fall following COVID with the significant increase of WFH?  If so, how was that differential filled?

I take that £25bn, it will fill RR's hole in the budget, assuming there ever was one. Fuel duty is a better tax because it's hidden and around 70p per litre, yet yields £28-25bn per year. 

Cornucopia

I'm going to get an EV anyway

I voted "Getting one anyway", although in fact, I've just got a new (used) EV a few weeks ago.  It replaced a previous leased EV which went back at the end of its term (with substantial depreciation protection).

EVs are less of a "one size fits all" solution than ICE, and there's no point pretending that that isn't the case.   People need to assess their driving needs and then crank the numbers.   That should tell them whether for them, an EV is a good deal or an excellent deal.  Maybe for a few high-milers, it's not a deal at all.

I wouldn't buy (for cash/HP) a new EV now and I didn't before.   Depreciation is still working itself out, and it's well worth having the forward planning and protection of a Lease or PCP.   OTOH, nearly new EVs are now very affordable with 2-4 yo models with 200-mile ranges and modest mileage on sale for £8-£14k.   

I don't think the 2028 tax will have much effect, and I think there's also a viable side bet that the fair implementation of it will prove too hard or too costly and it will be quietly U-turned.

chrisw

born_again said:

3p on top of my 2p a mile is still over 50% less per mile than my previous HEV

Yes it will go up each year, but something has to replace the annual £25 Billion fuel duty rakes in..

Only someone living in cloud cuckoo land would think that EV's are not going to have to replace this black hole.

It's this % increase which annoys me. I do a regular 240 mile journey which costs me about £5 charging at home. This new tax will cost me an extra £7.20 when it comes in which is about a 150% increase.

Tree_pipe99

I'm going to get an EV anyway

chrisw said:

born_again said:

3p on top of my 2p a mile is still over 50% less per mile than my previous HEV

Yes it will go up each year, but something has to replace the annual £25 Billion fuel duty rakes in..

Only someone living in cloud cuckoo land would think that EV's are not going to have to replace this black hole.

It's this % increase which annoys me. I do a regular 240 mile journey which costs me about £5 charging at home. This new tax will cost me an extra £7.20 when it comes in which is about a 150% increase.

Or another way to look at it, in 2028 a petrol car's Fuel day & VAT will be 190% more than an EV's pay-per-mile tax.

born_again

I'm going to get an EV anyway

Grumpy_chap said:

born_again said:

something has to replace the annual £25 Billion fuel duty rakes in..

I am asking out of interest (because I genuinely do not know), if fuel duty currently generates £25 Billion, what is the most it has generated?  Did the amount raised via this process fall following COVID with the significant increase of WFH?  If so, how was that differential filled?

One would guess that during covid fuel duty did fall, as price per ltr dropped a lot. 
On that point you could add how was the loss of VAT filled, given people working from home & not buying take out foods ???

You have to forget about the past & look at the now & future. That is what the 3p a mile is about.

Manufactures have to sell more ev's each year (or not sell ICE to meet the %). Check google for ZEV mandate & % required. So purely by the % of new sold. Fuel duty is going to drop.

Ectophile

subjecttocontract said:

I think the 3p per mile in isolation is not so bad but taken together with the total package changes the situation.
* The cars are more expensive to buy than ICE cars.
* They suffer higher depreciation.
* Public chargers can be very costly.
* Winter weather affects vehicle range.
If you want one, get one, good luck with it but it won't be for me.

• The price difference is dropping year by year.  For some models, the petrol hybrid and EV prices are pretty much the same.
• That's why I bought a nearly new ex-demonstrator.  If you're buying used, then high depreciation is a good thing.
• True.  And the government did nothing to fix that.  Charge at home and you pay 5% VAT.  Use a public charger and you pay 20% VAT.  For the moment, an EV only makes financial sense if you can charge at home (or at work if the employer charges a sensible price).
• Yes.  It does for ICE vehicles too to some extent as they take longer to warm up, but you don't really notice.  When I bought my EV, I made sure that its real-world winter range was long enough for what I needed.

Car_54

Ectophile said:

• Yes.  It does for ICE vehicles too to some extent as they take longer to warm up, but you don't really notice.  

And ICE cars also use power for heater fans, heated windows, seats, mirrors, steering wheels etc, and wipers/washers.

MeteredOut

subjecttocontract said:

I think the 3p per mile in isolation is not so bad but taken together with the total package changes the situation.
* The cars are more expensive to buy than ICE cars.
* They suffer higher depreciation.
* Public chargers can be very costly.
* Winter weather affects vehicle range.
If you want one, get one, good luck with it but it won't be for me.

Interesting you say that but your poll response was 

"I was going to get an EV but won't now"

Were you really going to get an EV?

As stated previously, as someone who buys cars nearly new, I see any depreciation as a good thing. Surely only those swayed by shiny and new could see it otherwise?

subjecttocontract

I was going to get an EV but won't now

Yes I was seriously considering an EV, earlier in the year but decided against it for lots of reasons see below. To me the 3p per mile starter charge is just another negative contributing factor and it's a matter of how many negatives does one accept before they say enough, maybe the issues will be sorted by 2028 but I doubt it.

* Some of the media reports where people attempted a long journey and had problems charging their car along the way caught my attention. The chargers were either very expensive, or all in use, or were not working. Some of them required an app to be downloaded onto a phone. Different stops required different apps. All contributed towards putting me off my purchsse. One of my son's did a road trip with others to Germany and had some of these same issues.
* I usually only buy new cars so the heavy depreciation wouldn't be welcomed.
* I'm not sure if EVs are ok for towing.
* The charging infrastructure around the country doesnt seem to be quite where it needs to be just yet.
* Then I often wonder how the many millions of people who live in terraced houses or flats with no off street parking are going to manage to charge a car other than on public/commercial charge points.