Electric vehicles should be taxed on a pay-per-mile basis to make up for lost fuel duty revenue, charity group The Campaign for Better Transport has suggested.
In a letter to Chancellor Rachel Reeves, not having to pay fuel duty gives EV drivers a significant tax benefit over other drivers that should be addressed.
According to the RAC, which partners with the charity, fuel duty revenue will fall by £5bn over the next decade as the country shifts to EVs requiring another way to raise revenue for the upkeep of roads and motorways.
Simon Williams, head of policy at RAC, said: “A pay-per-mile system could be set up according to vehicles’ emissions, with EV drivers paying the least to further encourage take-up, and ‘gas guzzlers’ paying the most.”
Silviya Barrett, of the Campaign for Better Transport, said: “The new Chancellor faces a looming black hole. She can avoid it, in a way which is fair and garners broad public support. But she should start now, as this issue will only get more pressing.
“It should be cheaper to drive a zero-emission vehicle than a more polluting vehicle, but it’s only fair that these drivers should pay a share, and a pay-as-you-drive model can achieve this.”
Reeves delivers her first Budget on 30 October with a groundswell building about changes to road tax.
According to the Telegraph, senior aides to former chancellor Jeremy Hunt urged him to “start preparatory work on a road pricing scheme” due to the potential loss of fuel duty income.