The ever growing popularity of eco friendly electric cars is likely to cause the Government major funding problems in the future with a footfall of nearly £5bn by the year 2030 as a direct result of lost fuel duty based on current figures.
Based on research conducted by Auto Express; in 5 years time there will be around a £213 million a year shortfall which will have grown to £4.8 billion 10 years after that (2030) based on there being around 5.9 million battery powered cars and vans on our roads by that time. This has been based on the Government’s aim to reduce emissions by 80 per cent by the time we get to 2050.
The latest Go Ultra Low figures have also backed up the above by showing that total charging volumes have tripled since 2014 alone and 90% of electric vehicles (including hybrids) are now being charged at home too. Director of Ecolane, Dr Ben Lane, said; “The Government knows there’s a problem and it’s part of the thinking behind realignment of VED bands.”
Of course the Government will want a way to close the deficit they face as a result of fuel duty decreasing and economists suggest this is likely to be done in one of a few ways. Firstly, they may charge electric vehicle owners an extra fee to make up for the lost money, petrol and diesel may be taxed higher to close the gap or a tax could be put on electricity via the use of smart meters.
In essence, it is inevitable that a time will come whereby the bonuses of having an eco-friendly vehicle could be taken away and tax will have to be reintroduced however it won’t be an easy task. Fuel duty is an easy thing to tax but there could be a backlash from UK drivers when they are asked to pay more money to use something which is good for our environment.