Quick Summary
Rachel Reeves is expected to announce new funding to bring prices of electric cars down as part of the UK’s autumn budget this week.
However, the chancellor also reportedly plans to introduce a “pay-per-mile” tax on EV charging, which could cost existing owners over £200 extra a year.
The UK’s chancellor is expected to deliver both good and bad news for electric car owners this week, as part of the long-awaited budget.
The Guardian reports that Rachel Reeves will announce measures to cut the costs of buying a new electric car – which will be welcomed by those currently put off by their cost in comparison with traditional alternatives. There will also be investment in the UK charging infrastructure, it’s claimed, with £200m being put aside for additional charging points.
However, it is also thought Reeves will announce a new “pay-per-mile” scheme, which will add a levy on electric charging. This could increase the cost of running an electric car by an average of £276 per year.
This will naturally hit those who already own EVs the hardest, as new owners will be able to mitigate the additional cost through the reduction in the initial price of the car.
New EV investment in the UK
The UK government is said to be investing a further £1.3bn in those subsidies, which will take the overall spending on EVs to £1.5bn, including the increased infrastructure investment.
“We’re backing the switch to electric with a £1.5bn package to cut upfront costs, accelerate charge-point rollout and unlock jobs and opportunities – making it easier for people to go green and boosting growth across the country,” a source told The Guardian.
But the founder of electrifying.com, Ginny Buckley, believes the budget will send out mixed messaging:
“It is good news the electric car grant is getting topped up and that the Treasury realised they had not allocated enough to it in the first place.
“Having said that, the policy around EVs is really confused. You can’t incentivise people to get EVs while also floating the idea of pay-per-mile chargers.”
We’ll find out more on Wednesday 26 November, when the UK government announces its autumn budget.