The government has been urged by the House of Lords to reduce the value-added tax (VAT) on public electric vehicle (EV) charging from 20% to 5%. This would enable auto charging to be more affordable than gas station fill-ups.
EV owners currently pay less when charging at home, but those without off-street parking or who rent an apartment without a charger are frequently totally dependent on public charging stations, which raises expenses.
The Lords’ Environment and Climate Change Committee made the call in a new report released today.
Commenting on the report, enquiry chair Baroness Parminter said: ‘If the government doesn’t equalize the VAT soon, we see that as a major hurdle in terms of costs for people who are thinking about the lifetime costs of EVs – even though the majority are cheaper than ICEs [internal combustion engines – petrol or diesel cars].
‘It’s also a real flashpoint around fairness, because 40% of homes don’t have access to chargers, so that’s 40% of the population who are paying more to charge their vehicles.’
The report, titled ‘EV strategy: rapid recharge needed’, did not speculate on how the VAT cut could be funded, but reported other countries had done so by taxing the purchase of new petrol and diesel vehicles, known as a ‘bonus-malus’.
‘We didn’t specifically look at routes to take this forward,’ said Baroness Parminter. ‘We said it was for the government to assess the route they wanted to take with the bonus-malus approach.
‘All we’ve said is the government needs to come clean about the costs involved in buying EVs.’
From April 1 2025, EV drivers will start to pay road tax, having been previously exempt.
The report also blasted the government for failing to deal with a ‘concerted campaign of misinformation’ regarding the range and safety of EVs.
While noting Number 10 had acknowledged the recent trend, the report stated: ‘The government’s concern at the scale of misinformation, however, has not been matched by commensurate urgency in tackling it.’
Baroness Parminter said: ‘There has been a lot of [stories] recently around the fire risks associated with EVs, trying to put fear into people because obviously you drive your family around in them, so safety is a big issue.
‘But the evidence we’ve received from the Association of British Insurers is there there is no discrepancy around fire risk, whether you’re talking about an ICE car or an EV.
‘It seems like a real attempt to try to drive fear into people.’
Baroness Parminter also took aim at those hyping charge anxiety.
‘There’s misinformation and there’s genuine information, as we’ve identified in the report,’ she said. ‘As we’ve identified in the report, the government hasn’t put in place enough EV charge points, and failed miserably in its motorway service targets, with only 33% having the requisite six working chargers.
‘It’s not misinformation to say there aren’t enough out there.
‘It is, however, misinformation to keep focusing on that at the expense of not highlighting the benefits of EVs, which are, over a lifetime, cheaper costs, reduced air pollution, and reduced carbon emissions.
‘Surface transport is the biggest single sector in terms of our net emissions – it’s 23% of our carbon emissions – and passenger cars make up over half of that. Driving EVs is going to get us to net zero
‘But there’s almost a concerted campaign to not be honest with people.’
A spokesperson for the Department for Transport said: ‘After more than a decade of government grants and tax incentives, the number of electric cars on our roads has significantly increased, with over a million now on UK roads.
‘We are continuing to support the switch to electric with more than £2 billion, seeing a 45% increase in public chargepoints since January last year, putting us on track to install 300,000 public chargepoints by 2030.
‘This week alone we have made chargepoints more accessible, with the first councils starting to receive part of the £381 million local electric vehicle infrastructure fund alongside new grants to install charge points in state schools and nurseries.’
