New pay-per-mile taxes could 'eliminate' confidence in electric cars as drivers stick to petrol

Labour's proposed pay-per-mile tax on electric vehicles could damage the UK's net zero ambitions, motoring experts have warned.

New research from YouGov shows that most drivers are still leaning towards petrol cars despite years of pressure to switch to electric vehicles.

According to the data, 55 per cent of people looking to buy a new car are still considering a petrol engine, while only 37 per cent are thinking about buying an electric vehicle.

Experts at LeaseLoco explained that growing costs linked to electric cars are making drivers think twice about making the switch.

The concerns come after Chancellor Rachel Reeves announced plans to introduce a pay-per-mile tax for EV drivers in the coming years.

The new charge is expected to be brought in as a new revenue stream to replace money lost from fuel duty, caused by more motorists moving away from petrol and diesel cars.

Under the proposals, electric car drivers could be charged around 3p per mile, while hybrid owners would pay a slightly lower rate at 1.5p.

But motoring experts warned the move risks removing one of the biggest advantages of owning an electric vehicle, lower running costs.

John Wilmot, founder and CEO of LeaseLoco.com, said the plans could slow the transition to greener vehicles.

He explained: "One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay-per-mile tax risks eliminating that advantage, which could make drivers think twice about switching any time soon."

Electric vehicle owners have already faced several extra costs in recent years. Drivers now have to deal with higher insurance premiums, rising home charging prices and the introduction of Vehicle Excise Duty for electric cars.

Experts warned that adding another charge on top could discourage even more motorists from buying EVs.

LATEST DEVELOPMENTS

• Labour slashes major car taxes to £1 for popular vehicles as Iran crisis sends fuel prices soaring
• Rachel Reeves scraps fuel duty hike in September as growing pressure forces Labour to 'step up'
• Soaring petrol and diesel costs risk pushing drivers to ditch cars and 'rethink' travel options

Mr Wilmot said drivers are already receiving "mixed messages" from the Government over electric vehicles. "We want people to switch to electric cars, but they're dealing with limited charging infrastructure and other rising costs, which can leave them questioning whether it's even worth it," he said.

The Government has repeatedly committed itself to net zero targets, including plans to phase out new petrol and diesel cars over the coming years as part of the Zero Emission Vehicle mandate.

However, concerns remain about whether Britain's charging network is ready to cope with millions more electric vehicles on the roads.

Some drivers have also complained about long charging times, expensive public charging stations, and worries over battery life. Mr Wilmot warned the proposed tax could damage confidence in the electric car market at a crucial time.

"A pay-per-mile tax could, unfortunately, slow down the progress of the Government's net zero goals," he said. "Lower running costs were a huge part of the incentive for going electric. Taking that away risks stalling the momentum we have built by giving people confidence in electric vehicles."

Despite the concerns, LeaseLoco says interest in electric vehicles has continued to grow, particularly among company car drivers and motorists looking to cut fuel costs.

Mr Wilmot added: "As a leasing company, we've been seeing more drivers express their interest in electric options than ever before, but there's no doubt that this could make people hesitate.

"Understandably, drivers want clarity before committing to making the switch to electric, and it's hard to have confidence when the rules and the costs keep changing."