Drivers handed 'two new incentives' to switch from petrol or diesel to EVs

Drivers handed 'two new incentives' to switch from petrol or diesel to EVs

by · Birmingham Live

Chancellor Rachel Reeves has announced two new incentives to encourage more drivers to make the switch to an electric car. Labour Party Chancellor Ms Reeves highlighted that the Government will extend the current company car tax rate on EVs until 2028 and make electric vehicle owners pay a different rate of tax than petrol and diesel car owners.

She explained: "I will maintain the incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first year rates of Vehicle Excise Duty from April 2025. These measures will raise around £400 million by the end of the forecast period."

Paul Barker, editor of Auto Express said: "The freezing of fuel duty for another year is great news for drivers fearing a big rise at the pumps, and also prevents people being hit in the pocket for goods and services. Another £500m to tackle the pothole epidemic is also welcome, but the years of neglect mean that’s not going to make much of a dent in the state of the UK’s roads. However the details beneath the surface hide the Treasury's moves to push drivers towards EVs by hammering petrol, diesel and hybrid cars.

READ MORE New £175 charge for drivers starting today is 'disaster'

“Doubling first-year Vehicle Excise Duty rates for anything over 75g/km alongside big hikes for non-EVs below that adds a notable cost, especially for high-polluting cars over 255g/km that will now cost almost £5,500 in first-year VED alone. Extending the company car benefit-in-kind and first-year Vehicle Excise Duty incentives for electric vehicles is handy from a transparency point of view, but won’t do anything to boost interest in a sector that needed a bigger initiative. And the huge rise in company car benefit-in-kind tax for hybrid cars from 2028 in particular is a real blow for that fuel type, and will ensure that only electric company cars are really viable from April 2028."

And Om Shankar, General Manager & Vice President, Konect (EV charging provider), said:"The government has previously stated its aim to accelerate the rollout of electric vehicle charging, but the budget falls woefully short in this area.

"We need a 500% increase in public EV chargers between now and the end of the decade to meet our stated goals and projected EV demand. Consultation is one thing, but sooner or later the government needs to show its hand. Some urgent action and lateral thinking on location of charge points and support for operators is needed."