Drivers have been warned that they may face a ￡605 tax rise in April if they own a certain car type (Image: Getty)
A top motoring authority has urged the Government to rethink an upcoming change that could see electric car owners charged a fortune to tax their vehicle.
According to figures published by the Society of Motor Manufacturers and Traders (SMMT), 29,634 battery electric vehicles were sold in January 2025, up 41.6 per cent from the same month last year.
However, Mike Hawes, chief executive of the SMMT, noted that the Government's upcoming changes to how vehicles are taxed could see a sales slump.
He explained: "January’s figures show EV demand is growing – but not fast enough to deliver on current ambitions. Affordability remains a major barrier to uptake, hence the need for compelling measures to boost demand, and not just from manufacturers.
"The application, therefore, of the ‘Expensive Car Supplement’ to VED on electric vehicles is the wrong measure at the wrong time. Rather than penalising EV buyers, we should be taking every step to encourage more drivers to make the switch, helping meet Government, industry and societal climate change goals."
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All EVs over ￡40,000 will be subject to a further ￡410 tax for their first five years on the road (Image: Getty)
As announced by the previous Government in 2023, electric car owners will need to pay vehicle tax for the first time in April 2025. Much like petrol or diesel models, electric cars will be subject to a flat rate of ￡195 from the second year onwards.
However, electric vehicles with a retail price of more than ￡40,000 will also be subject to the 'Expensive Car Supplement' of ￡410 for the first five years they are on the road.
As a result, many owners of popular electric models, including the best-selling Tesla Model Y, are set to experience a staggering ￡605 increase in vehicle tax.
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The charge could see drivers turn to cheaper electric models, including ones made in China (Image: Getty)
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To help avoid a slump in demand for electric vehicles, the SMMT called on the Government to review the Vehicle Emissions Trading Scheme as soon as possible.
They advised: "This gap between demand and ambition is why the review of the Vehicle Emissions Trading Scheme and its flexibilities is essential and must deliver meaningful changes urgently.
"Else there will likely be significant negative consequences for the market, industry and, potentially, the consumer."
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Across the new car market, January 2025 was a difficult month for sales, with just 139,345 examples sold - a decrease of 2.5 per cent compared to the same time in 2024.
Petrol-powered models were still the most popular, accounting for around half of the market, with EVs making up a further 21.3 per cent.
The best-selling model of the month was the Kia Sportage, the South Korean family SUV which was also the most popular car of 2024, followed by the Nissan Qashqai and Vauxhall Corsa.