Billions of pounds in new road taxes were needed to cover the deficit caused by the electric car boom

The report warns that new road taxes of the billions of pounds needed to cover the deficit caused by the electric car boom

  • Billions of road taxes were needed to cover the deficit caused by the electric car boom
  • Rishi Sunak could lose GBP 5 billion by 2028, fuel tax revenues related to cars
  • It puts pressure on ministers to say whether they are planning “road tolls” for electric drivers










The new report warned that billions of pounds of new road taxes are needed to cover the tax deficit that will result from the switch to electric cars.

A study by the RAC estimates that Chancellor Rishi Sunak could lose nearly a third – or about £ 5 billion – in revenue from car-related fuel taxes by 2028.

The collapse in sales of new diesel cars in favor of electric models could cause annual car fuel tax revenue to fall from GBP 16.4 million in 2019 to GBP 11.4 billion in 2028, the analysis found.

The collapse of new diesel car sales in favor of electric models could cause the Treasury's annual fuel tax revenue to fall from GBP 16.4 million in 2019 to GBP 11.4 billion in 2028 (pictured image)

The collapse of new diesel car sales in favor of electric models could cause the Treasury’s annual fuel tax revenue to fall from GBP 16.4 million in 2019 to GBP 11.4 billion in 2028 (pictured image)

Figures from the Society of Engine Manufacturers and Dealers show that battery-powered electric vehicles accounted for 11.6% of the UK's new car market last year, up from 6.6% in 2020 (pictured file)

Figures from the Society of Engine Manufacturers and Dealers show that battery-powered electric vehicles accounted for 11.6% of the UK’s new car market last year, up from 6.6% in 2020 (pictured file)

This decrease of GBP 5 billion is roughly equivalent to what is spent annually on the operation, maintenance and improvement of motorways and major roads A in England.

The findings will increase pressure on ministers to reveal whether they plan to introduce “road tolls” for electric drivers who do not pay any fuel bills.

The system would see drivers pay per mile or per minute for distance or time spent on the roads.

Figures from the Society of Engine Manufacturers and Dealers show that battery-powered electric vehicles accounted for 11.6% of the UK’s new car market last year, up from 6.6% in 2020.

RAC Foundation director Steve Gooding (pictured) said Mr Sunak was facing a “dilemma” because the growth of electric cars was causing him to lose fuel tax, which is almost 58 pence per liter for petrol and diesel.

In 2021, new diesel cars accounted for 14.2% of all registrations, a decrease from 19.7% in the previous year.

RAC Foundation Director Steve Gooding said Mr Sunak was facing a “dilemma” because the growth of electric cars was causing him to lose fuel tax, which is almost 58 pence per liter for petrol and diesel.

He added: “While we all welcome the move towards greener governance, the sooner it takes place, the more pressing the dilemma for the Chancellor, who is facing an impending gap in public finances.

“Currently, electric car drivers benefit from subsidies for purchases and cheap operating costs as ministers push for more people to give up fossil fuels.

“But ministers must soon decide how and from where they will fill the fiscal hole that electrification will inevitably cause.”

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