Britons are snapping up electric vehicles

THE CARS on Britain’s roads are changing. According to the World Economic Forum, a global think-tank, more than a tenth of new cars sold in 2020 were powered by electricity. That is below the levels seen in some other parts of northern Europe, but four times as high as in America. And the shift from fossil fuels to electricity looks set to accelerate. Government plans to decarbonise the economy will require the number of battery-powered electric vehicles (EVs) on Britain’s roads to rise from around 100,000 currently to 3m by 2025, 10m by 2030 and 25m by 2035.

This rapid shift is necessary if Britain is to meet international obligations to reduce its carbon emissions. But an analysis by the Tony Blair Institute for Global Change, a think-tank, highlights three looming risks: a fiscal hole, increased inequality and more traffic jams. All three result from the way driving is taxed in Britain, namely largely through a levy on fuels. This makes driving an EV far cheaper than alternatives. The median British driver currently spends around £1,100 ($1,520) a year in total on fuel and vehicle excise duty (VED), a tax levied on most personal vehicles, of which around £750 is tax. But the typical owner of a battery-powered EV, which is exempt from VED, spends only £320 a year, of which just £20 is tax.

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