New UK Tax Rules Could Deter Electric Vehicle Adoption

Starting April 1, electric vehicles will lose their tax exemption, with added costs for higher-priced models raising concerns among experts.

Electric vehicles (EVs) registered from April 1 will no longer be exempt from vehicle excise duty (VED), with owners paying at least £195 annually from the second year onward.
A luxury car tax of £425 per year will also apply for EVs with a list price over £40,000, significantly impacting many models due to high battery production costs.
Auto Trader reports that 56% of EVs up to five years old on its site exceed the £40,000 threshold, compared to just 16% of petrol or diesel cars in the same age range.
Critics, including industry experts and pro-EV groups, warn the new taxes could discourage EV adoption at a critical time for decarbonizing transportation.
The Treasury defends the changes as necessary for fiscal stability during the EV transition, while maintaining some incentives to encourage uptake.