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    AA chief warns Rachel Reeves’s pay-per-mile cash grab could backfire for Labour

    3 days ago

    The AA President has warned that Rachel Reeves’ new pay-per-mile electric car tax charges could backfire, with drivers likely to be put off making the switch to EVs. Labour confirmed the new 3p per mile charges for electric car owners will be introduced in 2028, with Plug-In Hybrid owners paying 1.5p per mile.  However, AA President Edmund King has suggested extra taxes might lead to an increase in the number of “hesitant drivers” unsure whether to make the transition. Although admitting electric cars would still be cheaper than combustion models regardless of the fee, Edmund warned it could be a deciding factor for many already on the fence. This could lead to certain individuals making the decision to avoid switching to electric vehicles from petrol and diesel models. Speaking exclusively to the Express, Edmund said: “It will still be much more cost-effective to run an EV even with the 3p per mile charge, particularly if the owners can charge at home. Servicing costs are cheaper, and the cost of EV insurance and new EV car costs are coming down which will make EVs even more competitive. “Petrol or diesel drivers pay fuel duty of approximately 6p per mile, so the e-VED charge is half of that. Having said that, talking about an extra tax three years before it is introduced might get some hesitant drivers to avoid switching.” It’s set to be a major blow for Labour, which continues to promote the sale and adoption of electric vehicles. The Government has reintroduced grants, offering up to £3,750 off the brand new sale price of electric models. They have also brought in significant funding for charging stations, as well as adopting low Benefit-In-Kind tax rates and Vehicle Excise Duty (VED) incentives. Labour was also keen to bring forward the ban on the sale of brand new petrol and diesel models by five years from its 2035 date to 2030. Edmund added: “The OBR estimates that even taking into account the electric car grants and other incentives, the scheme might reduce the EV sales by 120,000 over five years.”
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