UK Pay-Per-Mile Charge For EVs Set For April 2028 – CleanTechnica

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The automobile is both a curse and a benefit. On the one hand, it gives people the freedom to go where they want in relative safety and comfort whenever they want. That’s the theory, anyway. Ever since Robert Moses re-imagined New York City as a car-centric city, the allure of the private automobile has grown to the point where there are now 1.645 billion private cars and light trucks scattered around the world.

The auto industry is a vital part of many national economies. Not only does it employ workers at its factories, it provides jobs to those who mine the Earth for raw materials such as iron, aluminum, nickel, and a host of other elements that are used to make the components that will become a finished automobile.

Then there are the sales outlets that provide jobs for mechanics and sales people. Banks make money from car loans, while insurance companies make money by selling auto insurance. In total, the auto industry provides 10.1 million jobs worldwide, with an economic impact of about $1.2 trillion.

Who Pays For All This?

But there is no free lunch. The cost of building roads, bridges, and tunnels is enormous. In the US, the Interstate Highway System begun by President Eisenhower represented the largest investment in infrastructure in the history of the country. After all that stuff gets built, it has to be maintained, which costs more enormous amounts of money, and it never, ever ends. Repairing roads, bridges, and tunnels is a giant industry in itself.

The question has always been, who should pay for the upkeep of the road transportation system? The simple answer is, those who drive on the roads should pay, which makes perfect sense until you dig a little deeper. Clearly, an 80,000 lb tractor trailer creates more wear and tear on roads than a Hyundai Accent. So, the owner or driver of the truck should pay more, right?

That is intuitively obvious to the most casual observer, except the vast majority of all goods and services are delivered at some point by tractor trailers and last-mile vehicles. That means taxes on them automatically increase the cost of the goods they deliver, which can put an undue burden on lower-income families who depend on those goods and services.

One strategy is to add user fees to the annual registration process. While that is convenient, it is based on assumptions about how many miles each vehicle will travel each year and the weight of cargo each will carry. Should a truck that carries styrofoam pay the same as a truck that hauls pig iron?

Fuel Taxes And Fairness

The most common means of raising money to maintain transportation infrastructure is by adding a tax to the cost of fuel. That addresses the driver who goes 50,000 miles a year versus the driver who goes only 5,000 miles a year. It is simple from a bureaucratic perspective. You buy fuel for your vehicle, you pay.

There are still issues about economic fairness. Fuel taxes are much more of a burden, relatively speaking, on poorer people than they are on the wealthy. Adding a few bucks to the cost of a fill-up may be a hardship for someone with a limited income, but less so for the person driving a Ferrari.

The point is, all taxes have a political component. Politicians are always skittish about raising taxes on voters. As satirist YIP Harburg wrote many years ago, “Each Congressman has two ends — a sitting and a thinking end. And since his whole career depends upon his seat…. Why bother, friend?” For those not familiar with Harburg, his primary occupation was as a lyricist and song writer. You may know two of his tunes — Over The Rainbow and Buddy, Can You Spare A Dime.

The degree to which politics works to offset a perfectly logical idea is this: In the US, the federal gas tax has not been increased since 1993. That is insanity. Among other things, it helps make big gas guzzling behemoths affordable at a time when they really should be headed for extinction. Instead, humans are headed for extinction, and gigantic battery-powered vehicles are not helping, either.

In a perfect world, fuel taxes would pay for everything needed to keep our transportation systems in good working order, but because taxes are such a political pain point, they are usually kept well below what they should be, so the money comes out of general revenues. We all wind up paying in the end, but because the general revenue appropriation is a line item buried somewhere in a 500-page-long legislative document, we are not aware of it the way we are when we see the total every time at the gas pump.

EVs Upset The Apple Cart

The calculus that rationalizes fuel taxes worked reasonably well — until electric cars entered the picture. EVs, by definition, do not pay any fuel taxes. Although drivers do pay state and federal taxes on the electricity they consume, those taxes are not dedicated to maintaining the transportation infrastructure. That doesn’t sit well with drivers of conventional cars, and they are letting their elected representative know they are not happy about the situation.

Some US states and the federal government have proposed charging EV owners up to $1000 a year to register their cars, which is clearly designed to punish people for driving on electrons instead of molecules. Putting such ludicrous plans aside, many have toyed with the idea of a “per mile” tax on EVs to equalize the burden between them and conventional car owners — keeping in mind the money those traditional car drives pay is just a fraction of what it costs to maintain the transportation infrastructure.

Everyone pays those general revenue taxes, so the bleating about how EV drivers are getting a free ride is just so much bloviating from ignorant people who know next to nothing about this topic.

Pay Per Mile For EVs In The UK

This week, Rachel Reeves, the chancellor of the exchequer in the UK — similar to the treasury secretary in the US — announced that, beginning in April 2028, EV drivers will be assessed a fee of 3 pence per mile as their contribution to the maintenance of the country’s transportation network. The current fuel tax is 52.95 pence per liter.

Assuming the average gas car gets 35 mpg (29 mpg US), that means the fuel tax will cost a typical motorist £2 and 11 pence to drive 35 miles or 6 pence per mile. That in turn means the EV driver will still pay about half what the traditional driver pays (not counting taxes assessed on the EV driver’s bill from the local electric company). By the time the EV assessment kicks in, the fuel tax is expected to rise to about 60 pence.

And how will the UK calculate the correct amount to charge drivers? According to This Is Money, “Instead of bringing in an invasive system where black boxes are fitted that track vehicle mileage, the Treasury has confirmed that EV drivers will ‘self-report’ their mileage and pay a fee based on that prediction.”

Cars in the UK that are more than 3 years old are required to pass an MOT inspection every year. The actual mileage will be recorded at the time of each MOT event. EV drivers will need to have their mileage verified by an MOT test center every year, even though the mechanical inspection is not required until they are three years old.

The Fairness Question

So, is this fair? Naturally, many don’t think so. Ford of UK has gone on record saying this is a poor time to be adding extra financial burdens to EV owners, as some of the air has leaked out of the electric car balloon recently. Howard Cox, the founder of FairFuelUK.com, warned the introduction of the policy will likely open the door for pay-per-mile charges for all cars irrespective of their fuel type. “Rachel Reeves’s 3p pay per mile on EVs is, I fear, the thin end of the wedge to make all vehicles, whatever their type of fuel, pay tax as they drive,” he said.

Actually, Mr. Cox, many think it is high time drivers pay according to their actual usage of the roadways, rather than some made up metric that is politically palatable but far removed from reality. By some estimates, the per-mile assessment will lead to a decrease in EV sales in the UK of more than 400,000 units by 2030 at a time when the government is attempting to encourage the transition to electric vehicles.

Over crumpets and orange marmalade in the CleanTechnica breakfast lounge this morning, most of our ace reporters were of the opinion that the UK proposal is rational, realistic, and reasonable. We are concerned about dongles that report our mileage remotely because of privacy concerns. It seems to us that recording actual miles driven once a year makes the most sense and 3 pence per mile is not an unreasonable amount.

CleanTechnica readers tend to have strong opinions on a variety of topics, so we are looking forward to reading what you have to say in the comments.