Demand for electric vehicles (EVs) risks being hampered further when benefits for petrol and diesel-free cars end next year, industry members say.
Exemptions from both vehicle excise duty and the expensive car supplement for EV drivers will end in 2025, coming after sales have already dropped behind government targets.
Extra charges are set to equate to £190 annually for EV drivers, based on current rates, while those will electric vans will face an additional £335 bill each year.
Close Brothers Motor Finance revealed a survey on Tuesday that showed 54% of EV drivers had bought their cars to take advantage of such savings.
A third of respondents were not aware of changes to road tax from 2025, the group added, with 33% of those noting they would not have bought an EV had they known.
Close Brothers sales director Lisa Watson pointed out that the government’s zero-emission vehicle (ZEV) mandate, which requires manufacturers to make up a growing proportion of their annual sales with EVs, was “already proving a challenge”.
Industry data released last week showed electrics were forecast to make up 18.5% of total car sales this year, below the government-mandated target of 22% for 2024.
“The removal of available incentives could further dampen demand,” Watson warned, causing “headaches for manufacturers” who risk fines for missing the target.
Further data on Tuesday showed EV sales across Europe, including the UK, had slipped by 7% in July and were flat for the year so far, dealing a blow to nations’ efforts to phase out petrol and diesel cars by 2035.
Watson added the upcoming changes in the UK left “less reason for motorists to consider making the switch” to EVs, prompting the need for further government support.