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July 15, 2022

Next on the agenda for fleets: how EV transition will lead to road taxes

By Alejandro Gonzalez

The fact that billions of pounds of new road taxes are likely to be needed to make the switch to electric vehicles (EVs) should prompt constructive discussion among the fleet sector, says FleetCheck.

Peter Golding, managing director at the fleet software specialist, said that the rapid growth in EVs – and the subsequent decline in revenue for fuel, road and company car taxation – means a road tax is almost inevitable.

The move to road charging would ostensibly replace the estimated £40bn in revenue currently generated from motoring taxes.

“It went under the radar a little but one of the things that Boris Johnson mentioned to the Commons Liaison Committee the day before his resignation was the probable inevitability of some kind of road charging scheme.

The response of the fleet sector should be to consider what this means and the kind of scheme it would prefer to see. 

“Now, exactly how much influence he has now is very much open to question but his comments did provide a window into Government thinking. The topic is clearly a live one – especially at a time when the public finances are under pressure – and it is probable that different models are under discussion.

“Our view is that it very much makes sense for the fleet sector to begin to give formal thought to the subject. The declining tax take resulting from electrification means that Treasury revenue will be falling every year. It is inevitable that some kind of new scheme fills the gap.”

Golding added that any road charging scheme needed to be, above all, fair and easy to use – especially when it came to payment processing.

“Our main concern is that the technology adopted proves too complex and, as a result, is difficult both to introduce and to use. There is a strong argument, we believe, for a graduated approach over time with simple systems being introduced in the first instance, such as tolls on some major motorways.

“However, what really needs to happen is for the views of all the fleet industry’s major players to be heard. This is something that is almost certainly coming and we should be doing everything to ensure that whatever solution is adopted meets our needs, as one of the major interested parties.

“It would be responsible to start constructive discussions now. There is some good work being done in this area already – such as by the Association of Fleet Professional’s Future Roads committee – and it would be positive for as many fleets as possible to make their views known.”

Road to EV is paved with challenges and telematics: Trakm8

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