EV Tax A Turn-Off For Buyers

Wed 23rd Nov 2022

Paying zero road tax was one of the biggest financial incentives many buyers saw for purchasing an electric vehicle, so following the recent u-turn from the government, it comes as no surprise that interest in EVs has slumped.

Research published this week in response to  the Chancellor of the Exchequer announcing plans to make zero-emissions electric vehicles (EVs) eligible for road tax, nearly 40% of vehicle purchasers are reconsidering their choice.

The eBay study revealed the consequences of adding another financial burden at a time when living costs are at an all-time high and the UK is facing its longest recession ever.

Nearly a quarter (23%) of respondents said that the announcement of a Vehicle Excise Duty (VED) charge from April 2025, announced in last week’s Autumn Statement, would not impact their decision to purchase an electric vehicle. In contrast, 37% of respondents said the announcement had either dissuaded them from purchasing an electric vehicle or caused them to reconsider their plans.

According to the eBay data, 16% of respondents said they will continue to drive but will buy EVs under £40,000 to avoid the Expensive Car Supplement, which will be applied for the first time on EVs from April 2025.

According to the survey, the incentives to purchase an EV are becoming less appealing; additionally, 18% of consumers are more concerned about the rising cost of charging than about the imposition of VED.

The top three concerns among respondents when specifically asked how living costs would affect their next car purchase, regardless of fuel type, were the UK economy entering recession; the cost of energy bills; and the impact of inflation on goods and services.

“At a time when momentum was building for EV sales, the Autumn Budget has polarised buyers’ views on whether the next car they purchase will be electric,” said Lucy Tugby, Marketing Director at Ebay Motors.

“Our research highlights just how sensitive some buyers are to the removal of what has long been a valued incentive and reward for going electric.

“As the clock ticks down on the 2030 ban on the sale of new combustion engine cars, this sends out a confusing message to buyers and could have ramifications for the government’s Net Zero targets.”