Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the application of Vehicle Excise Duty on (a) new and (b) existing electric vehicles from 1 April 2025 on the (i) affordability and (ii) trends in the level of ownership of (A) electric and (B) zero emission vehicles.

Vehicle Excise Duty (VED) is a tax on vehicles used or kept on public roads. As announced by the Government at Autumn Statement 2022, from April 2025, zero emission and hybrid cars, vans and motorcycles now pay VED in a similar way to petrol and diesel vehicles. Revenue from motoring taxes helps ensure we can continue to fund the vital public services and infrastructure that people and families across the UK expect.

The Tax Information and Impact Note published alongside Autumn Finance Bill 2022 estimated the impact on zero emission vehicle take-up of the measure to be ‘minimal’. It can be found here:

https://www.gov.uk/government/publications/introduction-of-vehicle-excise-duty-for-zero-emission-cars-vans-and-motorcycles-from-2025/introduction-of-vehicle-excise-duty-for-zero-emission-cars-vans-and-motorcycles-from-2025

The Government is committed to supporting the transition to zero emission vehicles. On 15 July the Government announced a major boost to the electric vehicle transition with the introduction of the £650m Electric Car Grant, supporting drivers purchasing zero emission vehicles with grants of up to £3,750.