The latest Autumn Budget has introduced a significant shift in how electric vehicles (EVs) will be taxed in the UK, with the government unveiling its intention to roll out a pay-per-mile taxation system for EVs.
This move is designed to address the projected decline in fuel duty revenues as more motorists transition to electric. We outline the key points for car dealerships.
1. Pay-per-mile system incoming
The government is set to implement a system where EV drivers will pay tax based on the distance they travel. This model will replace the current system, in which EVs benefit from zero road tax and are exempt from fuel duty.
2. Timeline and Details
While the exact timeline for the introduction of pay-per-mile taxation hasn’t been finalised, the Budget signals that dealerships should prepare for policy details to emerge over the coming months. Early indications suggest a phased approach, with pilot schemes likely before a national rollout.
3. Impact on EV Sales
The new tax could influence EV purchasing decisions. Dealerships should be ready to address customer concerns about running costs and highlight the continuing financial and environmental benefits of electric vehicles compared to petrol or diesel counterparts.
4. Technology and Infrastructure
Implementation will likely require new telematics or mileage tracking technology. Car dealers may need to help customers understand these systems and ensure vehicles are compliant with upcoming regulations.
5. Communication is Key
Transparent, well-informed communication with potential buyers will be critical. Dealerships should stay updated on policy announcements to provide accurate information and maintain consumer confidence in the EV market.
Looking Ahead
Although the pay-per-mile tax represents a change in the EV ownership landscape, the overall direction of travel remains clear: the UK government continues to support the transition to zero-emission vehicles. For dealerships, staying ahead of regulatory changes and proactively informing customers will be essential as the market adapts.
As you support your customers through these changes, remember that partnering with trusted aftercare providers can make a significant difference. Both AX and Motor Assist offer market-leading accident aftercare services that help keep your customers mobile, reduce disruption, and maintain customer satisfaction following an accident or incident. By working with AX and Motor Assist, dealerships can continue to deliver exceptional service and peace of mind, even as the EV landscape evolves.
And it doesn't stop there; we've recently launched a report urging a focus and reform on post-accident battery handling when an EV is damaged. We believe coordinated industry action should be a priority, with the development of national, standardised post-crash diagnostic and quarantine procedure. For more information on the state of EV battery longevity & post-accident outcomes, download the full report.
