Economics

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Electric cars - will road pricing be needed as a new source of tax revenue?

Graham Watson

13th September 2021

Larry Elliott looks at some of the economic implications of increased take-up of electric cars.

There are a number of issues that need resolving, not least the need for a more sophisticated charging network and the tax implications of the move.

Owning an electric car means that you pay 70% less tax than a petrol car, and this has implication for government finances.

Factor in the possibility that there'll be increased demand for electric cars, and Larry Elliott suggests that road pricing's going to be the way forward - not just on economic grounds in promoting an efficient solution - but also in making up for the lost tax revenue.

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