The boss of retailer Halfords Group PLC hit out at the Chancellor’s move to begin taxing electric cars, warning it will delay the delay from petrol and diesel motors, as per Market Screener.
Chief executive Graham Stapleton said Jeremy Hunt’s autumn budget announcement that EVs no longer be exempted from road tax from 2025 was “disappointing.”
Under the plans in the autumn statement, electric cars registered from April 2025 will pay the lowest rate of £10 ($11.99) in the first year, then move to the standard rate, currently at £165 (197.87).
Stapleton said it could impact electric vehicles’ mass adoption, making them both costly to purchase and now more expensive to run.
“There’s no doubt the duty change on electric vehicles is not helpful.” says Stapleton.
“It won’t help the adoption of EVs for sure – we were surprised to see that (in the autumn statement).”
“EV cars aren’t getting any cheaper quickly and increasing duty at this stage is disappointing.”
Since EVs arrived in the market, these models have been exempted from annual road tax as the Government sought to incentivize electric car uptake.
14.6% of new cars sales were electric
However, with an increasing number of drivers going for EVs, 14.6% of all new cars registered in 2022 up until the end of October were electric. The Government is under growing pressure to help fill the financial gap left by the road tax exemption.
Hunt said on announcing that it would “make our motoring tax system fairer” as the Office for Budget Responsibility (OBR) has noted that half of all new vehicles will be electric by 2025.
Changes raise an extra £1.6 billion
The Treasury showed the changes would raise an additional £1.6 billion ($1.9 billion) by 2027-2028.
In addition, Stapleton raised worries over the revelation that fuel duty could increase by almost a quarter next year under Government plans, coming at a time of already mounting cost pressures on drivers.
The OBR showed in its forecasts published along with the Budget that it is anticipating fuel duty to rise by 23% in the spring, increasing the price of diesel and petrol by around 12p per liter.
Stapleton said motorists face a “real challenge” amidst the cost-of-living crisis.
He added that the pandemic didn’t mean fewer cars on the road.
“There’s the same number of cars on the road as there was pre-Covid – maybe there’s less miles being driven, but the same number of cars, so people are still having to travel.”
Nearly one million signed for motoring loyalty club
Last week, Halfords noted in its recent half-year results that almost one million cost-conscious drivers signed up to its motoring loyalty club since it launched in March as they seek to make savings wherever possible on car servicing and MOTs.
The group said it saw under-pressure consumers cut back on non-essential spending and so-called “big-ticket” items, such as bikes and driving technology.
Pre-tax profits
It saw underlying pre-tax profits halve to £29 million ($34.7) for the six months to September 30, down from £57.9 million ($69.4 million) a year ago and warned the full-year result would be at the bottom end of its expectations.
