The NFDA has hit out at the 2026 Budget saying it was a “missed opportunity” to put a stop to the proposed mileage-based electric Vehicle Excise Duty system.
It warned warning that a mileage-based system could discourage motorists from making the switch to electric vehicles.
Instead, NFDA has proposed a fixed annual charge as a simpler alternative to mileage-based taxation.
This, it said, could reduce administrative costs and make the system easier to manage, while avoiding unnecessary complexity for motorists.
Sue Robinson said: ‘The 2026 Budget was a missed opportunity. The proposed mileage-based EV tax risks making electric vehicle ownership less attractive, leading to it to be becoming non-workable.
“Adding further costs and complexity for motorists could undermine progress towards wider EV adoption.”
Supporting the transition to electric vehicles remains a “key priority” for NFDA, which wants to see further investment in public charging infrastructure, particularly in rural areas, alongside a yearly delivery mandate to help meet the Government’s target of 300,000 public chargers by 2030.
NFDA has also called for VAT rates on public and domestic charging to be harmonised, helping to reduce costs for drivers without access to home charging. In its recent ZEV Mandate consultation response, NFDA proposed a 50% zero-emission car target and a 40% zero-emission van target by 2030, reflecting current consumer demand and market conditions.
The Chancellor has announced measures to reduce the cost of charging at local, lower-powered public charge points, with drivers expected to save an average of £150 per year. While this is a positive step towards improving affordability, NFDA continues to call for greater investment in infrastructure and fairer VAT rates.
Sue Robinson said: ‘Reducing public charging costs is a positive step, particularly for drivers without access to home charging. However, the difference in VAT rates remains an issue, and further investment is needed to make EV ownership more accessible.”
