Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason the Government has increased vehicle excise duty for (a) electric and (b) low emission vehicles; and whether she has made an assessment of the potential impact of this on trends in the level of consumers switching from (i) petrol and (ii) diesel vehicles to electric vehicles.

Vehicle Excise Duty (VED) is a tax on car ownership from which electric vehicles are currently exempt. As announced by the previous Government at Autumn Statement 2022, from April 2025, electric and hybrid cars, vans and motorcycles will begin to pay VED alongside petrol and diesel vehicles.

The Policy Costings document published alongside Autumn Statement 2022 when the change was announced estimates the impact on electric vehicle take-up to be “negligible”.

The Government is committed to supporting the transition to Zero Emission Vehicles and announced a number of measures at Budget to support EV take-up. VED First Year Rates are changing from 2025-26, with higher rates for polluting hybrid, petrol and diesel vehicles. In addition the Government maintained incentives for the purchase of EVs within the Company Car Tax and Salary Sacrifice regimes, and extended the 100% First Year Allowances for businesses purchasing zero emission cars and installing chargepoint infrastructure.

Revenue from motoring taxes helps ensure we can continue to fund the vital public services and infrastructure that people and families across the UK expect.