New car tax charge for one group of drivers backfires on Labour – Birmingham Live
New car tax charge for one group of drivers backfires on Labour
Labour has been warned over plunging electric car sales – with pay-per-mile car taxes and discounts set to be brought in. One in four of new car sales in 2025 were electric vehicles, according to official government statistics.
But amid the launch of new pay-per-mile car tax, at a 3p rate for EVs, motorists are seemingly being put off switching from petrol and diesel.
Data from the Society of Motor Manufacturers and Traders (SMMT) found that car brands spent more than £5billion over the last 12 months to subsidise the price of EVs.
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This is equivalent to £11,000 for every new electric vehicle registered.
Mike Hawes, chief executive of the SMMT, said: "The Electric Car Grant is helping, but manufacturers are still having to provide billions in EV discounts, with an unparalleled £5billion spent last year alone. This is patently unsustainable.
"Furthermore, the impact of Government and industry investment will be diminished by a new disincentive – the proposed eVED tax.
"With EV demand below the levels targeted by the ZEV mandate last year, and this year's target even steeper, a review of the transition – looking at demand as well as cost and the broader ecosystem – must be brought forward to ensure ambition aligns with natural market demand."
It comes as plug-in vehicles enjoyed continued growth as petrol and diesel registrations dropped.
Full battery electric vehicles enjoyed the strongest growth in November 2025 – the most recent month for which full data is available – and helped drive overall market growth despite declines elsewhere.
EVs saw a 37% year-on-year increase across the continent and took a 23.5% market share, up 5.9 percentage points compared with November 2024, according to data from JATO Dynamics.
In contrast pure ICE vehicles, encompassing petrol and diesel, were down 20% compared with the corresponding period in 2024, but the powertrain still accounted for 30.6% of all registrations in November, with 329,064 units registered.
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