Drivers face having to stump up £220 under rule change after exemption scrapped

Concern is growing that people will be put off buying electric vehicles because most will also have to pay ‘expensive car supplement’.

Green motoring just got more expensive as EVs lose exemption under a major shake-up under the Labour Party government. Concern is growing that people will be put off buying electric vehicles because most will also have to pay ‘expensive car supplement’.

Drivers of EVs have lost their exemption from the tax and also have to pay an “expensive car supplement” for five years if a new vehicle costs more than £40,000, which many do.

The move has prompted concern that people will be put off buying EVs. John Cassidy, the managing ­director of sales at Close Brothers Motor Finance, said: “Applying VED to EVs provides one less incentive for buyers to make the switch.”

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The Guardian newspaper has pointed out a motorist buying a new 1-litre Ford Puma now has to pay £440 tax for the first year – up from £220.

Lorna Macpherson, a motor finance expert at Ocean Finance, which offers car loans, says: “For petrol and diesel cars, an increase in VED means higher ­running costs for owners, ­making newer, more efficient cars even more attractive.

“But with rising interest rates on car finance and the general cost of living ­crisis, many will hold on to their ­current vehicles for longer rather than upgrading.” The warning comes in the same week EVA England responded to the Government announcement on the ZEV Mandate and return to a 2030 phase out date for petrol and diesel cars.

Warren Philips, Chair of EVA England, says: “For drivers to consider switching to electric they need clarity and certainty and it’s encouraging to see the Government confirm no new petrol or diesel cars will be sold from 2030. These targets are an essential roadmap to help drivers plan ahead.

“The transition will not take hold on its own however and it is disappointing no additional measures were included today for drivers who, similarly to car manufacturers, need some support to make the switch.

“We need Government input to tackle high EV upfront costs in the short term and to help more households access charging affordably, especially for those who can’t easily plug in at home. Failing to tackle prevailing barriers to uptake will scupper the Government’s rightly ambitious targets to move away from petrol and diesel this decade.

“We look forward to working with the Government on its Industrial Strategy and beyond to ensure these essential measures are considered and the transition to electric is shaped with drivers’ needs in mind.”