What if We All Drove Electric Cars?

Electric cars are regularly heralded as being the future of the motoring industry. But what would happen if we all suddenly ditched our current motors in favour of an electric alternative tomorrow morning?

Well, it would cost the government £24 billion in lost tax every single year according to MoneySupermarket. Unsurprisingly the vast majority of this is made up of fuel duty charges, which the government has obviously become too reliant upon. The rest of the £24 billion total consists of road tax, congestion charging and tax which is placed on car insurance premiums. The government would make an additional £418,499,283.81 per year from tax placed on the additional electricity used, but this would be of little consolation in light of the other loses.

It would of course prompt the government to make accrue tax from other areas, potential through higher road tax premiums or maybe even a higher rate of tax placed on electricity usage which would hit all households. Either way, this really indicates that the government will need to change its tax practices substantially if the electric car movement becomes a reality.

However, on an individual level the savings available are not particularly substantial enough to warrant the additional cost of buying an electric vehicle. When you consider that a brand new Nissan Leaf is about £12,000 more expensive than a basic Ford Focus; an annual saving £952.08 really isn’t good enough.

The data has been summarised in the following infographic:

 

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One thought on “What if We All Drove Electric Cars?

  1. The UK is no exception to this, but what would actually happen if every driver in the country suddenly ditched their current vehicle in favour of an environmentally friendly electric alternative? Well, it would cost the government approximately £24-billion per year according to price comparison website MoneySupermarket. Unsurprisingly fuel duty made up 80% of this total, with British motorists currently facing the highest fuel duty rates in the whole of Europe. The rest was made up of road tax and congestion charging, with electric vehicles being exempt from both of these.
    Tax accrued from car insurance would also take a bit of a hit, with insurance premiums being on average 5% cheaper for these environmentally friendly vehicles with smaller engines.
    The government would gain an additional £418-million from tax placed on electricity, but the way that tax is gained would need to be seriously reviewed if this were to become a reality. It is possible that the government will start to place a higher rate of tax on electricity charges and possibly also pump up road tax charges which will start to cover electric cars.

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