Electric Car switch causes gap in Govt finances
Discussion
The rapid switch to electric cars in Denmark is leading to such a significant drop in road tax 
that it "would create a significant problem for the economy".
Link here: https://uk.reuters.com/article/idUKKBN25Y1FS
I know the drop in tax raised from cars due to the switch to EVs has been discussed a few times here on PH, so it is interesting to see this concern becoming reality. Govts are going to have to come up with a different model for raising tax from cars.
that it "would create a significant problem for the economy".Link here: https://uk.reuters.com/article/idUKKBN25Y1FS
I know the drop in tax raised from cars due to the switch to EVs has been discussed a few times here on PH, so it is interesting to see this concern becoming reality. Govts are going to have to come up with a different model for raising tax from cars.
Scrump said:
The rapid switch to electric cars in Denmark is leading to such a significant drop in road tax that it "would create a significant problem for the economy".
Link here: https://uk.reuters.com/article/idUKKBN25Y1FS
I know the drop in tax raised from cars due to the switch to EVs has been discussed a few times here on PH, so it is interesting to see this concern becoming reality. Govts are going to have to come up with a different model for raising tax from cars.
Well if ICE cars are bad for the environment and our health as the government have told us for the last 40 years then a switch to electric will result in savings due to better health less drain on the NHS etc unless of course it was all BS an cars were just a way to get more tax. Which of course with mass WFH now we can all avoid. that it "would create a significant problem for the economy".Link here: https://uk.reuters.com/article/idUKKBN25Y1FS
I know the drop in tax raised from cars due to the switch to EVs has been discussed a few times here on PH, so it is interesting to see this concern becoming reality. Govts are going to have to come up with a different model for raising tax from cars.
It does make you wonder if the government have ever been honest about the reasons for tax....perhaps if we presented the budget as "we need to raise x to pay for y" and we will be doing it by charging "Z" on these things then it might be clearer. But to just keep bleating about the environment C02 and the like all seems a little false now.
Road pricing is likely the answer pay per mile. Of course this affects the poor more and will mean many in the middle won't drive as much which will still see a fall in tax receipts.
coolg said:
Or we could just go back to the original Tax fund where every car paidThe same fixed amount ....
Yeah!The gov will probably keep some element of the first year purchase tax though, based on the list price of a car.
The new differential could be about weight, or a range to weight ratio, in a drive to improve electrical efficiency too.
Scrump said:
The rapid switch to electric cars in Denmark is leading to such a significant drop in road tax that it "would create a significant problem for the economy".
Link here: https://uk.reuters.com/article/idUKKBN25Y1FS
I know the drop in tax raised from cars due to the switch to EVs has been discussed a few times here on PH, so it is interesting to see this concern becoming reality. Govts are going to have to come up with a different model for raising tax from cars.
Nobody could ever have foreseen that happening that it "would create a significant problem for the economy".Link here: https://uk.reuters.com/article/idUKKBN25Y1FS
I know the drop in tax raised from cars due to the switch to EVs has been discussed a few times here on PH, so it is interesting to see this concern becoming reality. Govts are going to have to come up with a different model for raising tax from cars.
Road pricing, and the reintroduction of road fund license (if it were the UK). I would also expect some extra taxation on the upfront purchase prices ("recycling tax" or something). No end of ways they can ream money out of motoring.
ntiz said:
Probably some kind of road pricing based on the worth of your car.
100 grand Tesla or Porsche etc will pay more than small run arounds. Will be the only way perceived as “fair”.
Not a bad idea, but what about the bargeistas amongst us who hoover up such executive cars for the square root of sod all when they're 10/15/20 years old? 100 grand Tesla or Porsche etc will pay more than small run arounds. Will be the only way perceived as “fair”.
ntiz said:
Probably some kind of road pricing based on the worth of your car.
100 grand Tesla or Porsche etc will pay more than small run arounds. Will be the only way perceived as “fair”.
on the face of it, yes, but what about when your £100k car is a few years old and £10k, that will 'exploit the poor' and discourage sales of expensive new cars, whilst cripplng secondhand prices.100 grand Tesla or Porsche etc will pay more than small run arounds. Will be the only way perceived as “fair”.
it's not easy.
Greg_D said:
ntiz said:
Probably some kind of road pricing based on the worth of your car.
100 grand Tesla or Porsche etc will pay more than small run arounds. Will be the only way perceived as “fair”.
on the face of it, yes, but what about when your £100k car is a few years old and £10k, that will 'exploit the poor' and discourage sales of expensive new cars, whilst cripplng secondhand prices.100 grand Tesla or Porsche etc will pay more than small run arounds. Will be the only way perceived as “fair”.
it's not easy.
As a basic idea seams the most likely to me.
austinsmirk said:
My wife’s ev cost £223 in electric for a year and nil tax
In diesel it would have been say £1400 and say £150.
Quite clearly a massive drop in revenue for the govt. equally no need for a petrol station and presumably all the tax/rates they must pay out.
My personal belief is that at the moment EVs are living In a very nice bubble. The tax breaks are huge and running costs tiny. I think when EVs become the normal the cost of running will be about the same as ICE. In diesel it would have been say £1400 and say £150.
Quite clearly a massive drop in revenue for the govt. equally no need for a petrol station and presumably all the tax/rates they must pay out.
No one ever said EVs we’re going to be the promised land of cheap motoring for the masses. I think it’s just carrots until we all switch. Then will be back to the tax stick one way or another.
New Zealand has "road user charges" for vehicles which don't use petrol - only petrol is taxed at the pump.
Small diesels pay about 6p per mile, based on speedometer readings. Anecdotal evidence suggests speedo fraud is not insignificant.
At present electric vehicles don't pay RUCs. I suspect no one in government can work out how to tax hybrids.
Any system of charging vehicles based on road use is going to be a logistical nightmare and open to abuse/hacking, but what other system is there going to be?
Maybe they will look at efficiency (WLTP-style) for figuring things out. A Kona/Niro would then cost less than the eTron.....in a 'similar' way to how they had CO2 emissions-based tax in the past. Keeps a mild semblance of eco-feeling....
Of course, those should then cost less than the older gas-guzzlers.
Tricky though - can't see that happening.
But yes, once EVs get a bit more traction (& it is building up a head of steam), there will be a hole in that finance. Hence perhaps the initial charge based on value...
Of course, those should then cost less than the older gas-guzzlers.
Tricky though - can't see that happening.
But yes, once EVs get a bit more traction (& it is building up a head of steam), there will be a hole in that finance. Hence perhaps the initial charge based on value...
ntiz said:
austinsmirk said:
My wife’s ev cost £223 in electric for a year and nil tax
In diesel it would have been say £1400 and say £150.
Quite clearly a massive drop in revenue for the govt. equally no need for a petrol station and presumably all the tax/rates they must pay out.
My personal belief is that at the moment EVs are living In a very nice bubble. The tax breaks are huge and running costs tiny. I think when EVs become the normal the cost of running will be about the same as ICE. In diesel it would have been say £1400 and say £150.
Quite clearly a massive drop in revenue for the govt. equally no need for a petrol station and presumably all the tax/rates they must pay out.
No one ever said EVs we’re going to be the promised land of cheap motoring for the masses. I think it’s just carrots until we all switch. Then will be back to the tax stick one way or another.
Wait until there's critical mass, then austonsmirk's Mrs' EV will have a tax rate of £1,600 a year. Job done.
Greg_D said:
on the face of it, yes, but what about when your £100k car is a few years old and £10k, that will 'exploit the poor' and discourage sales of expensive new cars, whilst cripplng secondhand prices.
it's not easy.
£100k cars are still £100k cars to run even when the entry price is £10k.it's not easy.
The govt won't care about the secondhand market. I'm not sure first owners will much either.
They should have vehicle weight as a factor in tax IMO.
Why not just have a lot or road tolls. Drive less pay less etc. Issue we have is people are driving less due to remote working and using home delivery. So in the long run tax was always going to fall coupled with the fact many small cars now easily do 50mpg so spend less at the pump etc.
I can't see black boxes in cars on mass in the near future given older cars won't have them but longer term I suspect we will get some sort of pay as you drive device installed.
I can't see black boxes in cars on mass in the near future given older cars won't have them but longer term I suspect we will get some sort of pay as you drive device installed.
Gecko1978 said:
Why not just have a lot or road tolls. Drive less pay less etc. Issue we have is people are driving less due to remote working and using home delivery. So in the long run tax was always going to fall coupled with the fact many small cars now easily do 50mpg so spend less at the pump etc.
I can't see black boxes in cars on mass in the near future given older cars won't have them but longer term I suspect we will get some sort of pay as you drive device installed.
Yeah great isnt it? More tracking devices....I can't see black boxes in cars on mass in the near future given older cars won't have them but longer term I suspect we will get some sort of pay as you drive device installed.
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