EV Mileage Tax Impact

Those financial incentives make EVs a more attractive prospect for drivers, which is why it’s important the Government has extended the Electric Car Grant by another year. Although, the £1.5 billion package to continue subsidising EVs and helping to increase the number of reliable charging points nationwide, is offset by the decision to introduce a new mileage tax on EVs and plug-in hybrids.

We appreciate the need to replace the revenue lost by fuel duty but introducing a tax on EVs at this stage risks slowing the growth of both the EV and electric charging markets while both are still very much finding their feet. It also sends mixed messages to motorists looking to make the switch to electric and could even make EVs less financially attractive.

We welcome the subsidies and the additional investment in charging infrastructure, but any slowdown in EV sales would create uncertainty for the automotive, EV charging, electricity network, and low carbon supply chain industries, reducing the ability to plan for future demand.

Taxation will be inevitable as the EV market matures, but for now, the UK is still building out the essential infrastructure and charging networks needed to support widespread EV adoption. Focus should remain on encouraging investment and growth to accelerate the move to clean transport. The Government has an important role to play in supporting adoption and helping to ensure a smooth transition.”

Cutting Green Levies and ECO

“It’s essential that we strike the right balance between easing energy costs today and investing in the clean energy future the UK urgently needs. We welcome measures that provide immediate relief for households and businesses facing high bills. Cutting green levies, such as the Energy Company Obligation (ECO), will offer immediate savings for households affected by the cost-of-living crisis.

However, it is critical that funding for programmes such as renewable energy investment and energy efficiency upgrades is not removed as these are vital for long-term energy security and resilience. Simply reducing these charges risks slowing progress toward net-zero, undermining energy efficiency schemes, and increasing exposure to volatile global fossil fuel markets.

To deliver lasting benefits, we must pair short-term affordability measures with a clear commitment to long-term solutions - such as scaling up renewables, improving grid infrastructure, and supporting behavioural change. Only by prioritising these investments can we ensure a more sustainable, resilient energy future for the UK.”

Kelly Becker, President, UK, Ireland, Belgium and The Netherlands, at Schneider Electric