Fleet industry warns that lack of tax certainty could stifle EV adoption

The BVRLA, AFP and Fleet News are urging the Government to maintain confidence in the battery electric vehicle (BEV) market by providing more clarity on future tax rates.

Low tax rates and the security of a five-year roadmap on future charges have seen the BiK regime become the single biggest driver of zero emission vehicle uptake in the UK. It has driven a surge in decarbonisation within the company car and salary sacrifice markets, where BEVs already make up 8% and 22% of the total fleet, respectively.   

New BEV volumes are much higher, suggesting these sectors have a great chance of meeting the Government’s 2030 target for phasing out sales of petrol and diesel cars. But this momentum is now at risk, with many fleets and drivers being forced to consider lease contracts for BEVs without knowing the tax they will be charged over the full duration of the agreement.    

“The Government has made it clear that it is looking to shore-up motoring tax revenues as the shift to zero-emission motoring accelerates,” said BVRLA Chief Executive, Gerry Keaney.  

“As a result, potential BEV adopters are getting increasingly nervous of a sudden cliff-edge increase in BiK rates in 2025/6, which could shatter the affordability of electric cars.   

“The Government must provide more certainty by publishing rates for 2025/6 and giving a clear roadmap on how charges could rise in the run up to the phase-out deadline.” 

Together, the BVRLA, AFP and Fleet News have three clear BiK asks for the Chancellor ahead of his upcoming Budget: 

  • Publish 2025/26 BiK rates as a minimum. Every extra year of foresight builds market confidence  
  • Pledge that BEV BiK rates will not rise above 10% before 2031/32 
  • Commit to a BEV BiK escalator that increases rates by less than 3% a year 

They are urging fleet operators, employers and drivers to support their campaign by sending their own Budget submission to the Chancellor or writing to their local MP asking for their support.  

More details on how to do this are available on the BVRLA website.