- The REA responds to the Government’s announcement that
Electric Vehicles will pay vehicle excise duty for the first
time, starting from 2025;
- Ending the road tax exemption for electric vehicles was
expected, but the REA warns that taxes on zero emission vans
could harm transition;
- However, the Autumn Statement also offers some positive
outcomes for the sector, and the REA reiterates its message that
more supportive policies, particularly in heat and transport, are
needed to achieve UK Net Zero commitments.
The Association for Renewable Energy and Clean Technology (REA)
has responded to yesterday’s announcements regarding the Electric
Vehicle (EV) sector confirmed by Chancellor when outlining the Autumn
Statement.
Electric Vehicles (cars, vans and motorbikes) will pay Vehicle
Excise Duty (VED) for the first time, starting from 2025. The REA
recognises that a form of taxation was inevitable at some point
due to the shift from vehicles paying VED and Road Fuel Duty to
those paying none, but the REA says that this will need to be
proportional and carefully managed in order to not negatively
impact the transition.
In particular, the REA warns that ending the exemption for zero
emission vans could harm the transition to these vehicles. The
REA also highlighted the need to make sure that there is full
equity for all vehicles to avoid a scenario where some
conventional (ICE) vehicles would, in fact, play less than zero
emission alternatives.
On a positive note, Company Car Tax rates will also be marginally
increased for EVs but investment rate allowances have been
extended to 2025 for charge points. The REA welcomes this policy,
and maintaining these company car tax incentives through Benefit
in Kind (BIK) rates, is an extremely positive outcome for the
sector. We participated in this successful campaign and are
delighted to see the work of the REA and its members have a
positive impact on the EV sector.
Jacob Roberts, Transport Policy Manager at the
Association for Renewable Energy and Clean Technology (REA),
said:
“While a change to Vehicle Excise Duty (VED) exemptions for
electric cars was to be expected, it is imperative that the
Government makes sure that they are not disincentivising the
transition for other vehicles such as zero emission vans.
“Within the Autumn Budget, the Government has overall
reaffirmed its commitment to Electric Vehicles and EV charging,
which is welcome, but the REA is continuing to urge the
Government to implement more supportive policies, particularly in
heat and transport, to make the energy transition a reality.
“The Autumn Statement also offered several positive outcomes
for the EV sector, including maintaining BIK incentives, a
campaign that the REA participated in, and are delighted at the
confirmation that they will increase by 1% per year.
“Renewable energy and clean technology is the cheapest form
of generation and best route to providing long term relief to the
dual climate and energy security crises.”
