Pay-per-mile charge is part of normalisation of EVs

BUDGET 2025: Government needs to make new levy easy to understand, says Vehicle Remarketing Association’s Philip Nothard

The big news is pence per mile road charging for introduction in April 2028. Its arrival is no surprise and really part of the ongoing normalisation of the electric vehicle and hybrid markets. 

The priority here should be to ensure that it doesn’t create a negative perception among consumers when it comes to both new and used electric cars, meaning it needs to be easy to understand and simple to collect. 

It should be noted that the rates being proposed by the government add up to road tax at about half the level of an internal combustion engined (ICE) equivalent.

Designed to offset any decrease in demand caused by road charging is the extension of the new electric car grant, a scheme which has been quite successful in recent months when it comes to increasing retail demand for EVs. 

It’s fair to say that the amounts being committed are substantial although I suspect, if you’d asked the remarketing sector, they’d have liked to have seen at least some of that cash channelled towards used EVs.

Elsewhere, it’s pleasing for dealers that employee car ownership schemes are being delayed, which will hopefully create time for more consultation, and the increase in the expensive car allowance is similarly welcome.

On a wider basis, given the challenges that the chancellor faces, this is probably a fairly balanced Budget. The effects of freezing personal tax thresholds are pernicious over time while the changes in salary sacrifice for pensions are also a negative but there is little here that will really upset businesses and some measures, such as help with electricity bills, might make consumers feel at least a little more positive.

Philip Nothard is chair of the Vehicle Remarketing Association