Reports in the Daily Mail refer to a leaked letter by Lilian Greenwood, minister for roads, stating that the £40,000 limit above which drivers must pay hundreds of pounds more in tax will be axed or raised for electric or battery-powered cars.
This tax, known as the ECS (Expensive Cars Supplement), has been in force since 2017 but did not apply to electric cars until 1 April 2025 – a decision made by Rachel Reeves in her recent Budget.
Auto Express recently calculated that it would affect seven out of 10 new electric cars sold in the UK.
Response to MP
The Daily Mail claims to have seen a letter from MP Greenwood to Ben Maguire, the Lib Dem MP for North Cornwall, saying that she realised there was a “disproportionate impact” for those buying zero-emission cars.
“We will consider raising the threshold for zero-emission cars only at a future fiscal event to make it easier to buy electric cars,” she stated. This suggests that an announcement on this may be made in the Autumn Budget.
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Many car makers, including Vauxhall, have been forced to lower their prices to just below the £40,000 limit to make their cars more attractive to buyers, and are losing out on revenue because of the tax.
More good news for EV owners
Those with EVs are also benefitting from the decrease in the energy price cap announced today, making it better value for them to charge their cars.
It’s predicted that the average price to fully charge an EV at an at-home charger in the UK will decrease from £16.21 to £15.43.
Figures from Carmoola, a car finance lender, suggest that EV drivers in the UK are set to collectively spend £33.3m per month – £1.7m less than currently – from July following Ofgem’s price cap decrease.
Aidan Rushby, Carmoola founder, said: “One of our recent surveys showed nearly a third of Brits were hesitant to switch to an EV due to rising energy prices, so this price drop could help change minds.
“With the 2030 ban on new petrol and diesel cars approaching, this is a timely opportunity to encourage more drivers to consider electric.
“To make the most of the savings, we recommend EV owners take advantage of off-peak energy tariffs where possible, charging overnight can make a real difference to monthly costs.”
