Will the Electric Car Lead to Taxation per Mile for Car Users?

As we covered in one of our earlier posts there is significant concern within political circles as to how countries such as the UK, and Holland, which depend heavily upon taxation from fuel sales will be able to replace this as and when electric vehicles become more popular. While it would be wrong to suggest that any official decision has been taken there is no doubt that contingency plans are in place as and when the electric vehicle market really takes off.

Is taxation by the mile really inevitable for electric car users?

While many people around the world may not be aware of the potential impact which electric car users will have in countries such as the UK and Holland for example, we will inevitably see a future revamp of the UK road taxation and fuel taxation system. One system which is very much at the forefront of many people's minds is taxation by the mile for the opportunity to drive on UK roads. But is this really inevitable?

Are the systems in place?

It may surprise many people to learn that the systems which would allow the government and local authorities to tax road users by the mile are already in place. We have already seen a number of pay per mile motorway stretches introduced to the UK which many believe are just a prelude to a total revamp of the UK travel taxation system.

These highly complex monitoring systems use the latest technology to calculate how many miles you have travelled on pay-as-you-go roads and automatically debit a preregistered credit or debit card to take account of your journey.

Would this replace fuel tax?

The subject of fuel tax is a rather difficult one to forecast because as and when the switch to electric power takes place there would need to be a substantial increase in power facilities across the UK which the government would argue requires additional funding which should be supplied by road users. Whether this would see pre-registered recharging sites charge tax per usage or perhaps there would be a sliding scale for recharging at your home, and using electric from the National Grid, remains to be seen.

However, the sad fact is that the UK government brings in billions of pounds a year from oil-based fuels tax which would at some point need to be replaced by a system which could, as we have seen with fuel tax, allow for an ongoing increase in income over the years.

What would happen to road tax?

Road taxation should in theory remain relatively stable even when we see the introduction of more and more electric cars to UK roads. However, it seems inevitable that those who maintain an oil-based fuel vehicle will be asked to pay a higher degree of road tax although it is unlikely that electric car users will escape totally unscathed.

We are already seeing the introduction of an environmentally friendly based road tax system which has been somewhat shrouded in mystery with the government suggesting significant savings for those with environmentally friendly cars even though the figures suggest the savings are nowhere near the levels promised. Many consider the significant income which the authorities receive from the UK road system, fuel tax and vehicles will be very difficult to replace in one go when the switchover to electric powered vehicles final hits top speed.

Has the change to pay per mile travel already been decided?

Unfortunately for UK drivers, and those in Holland as well, the introduction of pay per mile road use tax does appear to be inevitable. Successive governments have declined to give guarantees for the medium to longer term with regards to taxation on UK roads and the recent introduction of environmentally friendly based road tax is just one step towards pay per mile travel in the UK.

Under the guise of a number of different road related schemes we have seen the technology needed to monitor pay per mile travel introduced in many areas of the UK. It would take very little in the way of technological improvement to implement a nationwide pay per mile travel system, something which the authorities are well aware of.

How would this impact upon public travel services?

While in many ways the main losers in the changeover to pay per mile travel tax will be those who own their own vehicle, the main benefactor may well be the UK public travel network. There is a chance that more and more people would look to use public travel to reduce both their outlay on a new electric vehicle, potential pay per mile road tax and other charges which may well be associated with travel in the UK in the future.

When you consider the UK government already subsidises public travel in the UK, despite the fact that the rail and bus networks have been sold off, this could eventually lead to the withdrawal of subsidies which would add to the coffers of the UK public purse.

When will the UK government move to support electric vehicles?

While the recent £25 million electric vehicle program announced across the UK is seen by many as the start of the UK authorities move towards electric vehicles, this could well just be a short-term distraction. When you consider the likes of the USA are yet to embrace electric vehicles in the mass market, the UK authorities may well be held back from pushing electric vehicles in their own markets by their strong allegiances to leading countries such as the USA.

It only takes one major country around the world to introduce and support the mass-market production of electric vehicles for the sector to basically come alive. Once this boundary has been crossed the monster which is the electric vehicle market would then be unleashed on the worldwide market and has the potential to cause significant government funding issues across the world.

Conclusion

Slowly but surely the UK government has, and continues to, introduce a system across the country which can and does allow the authorities to monitor pay per mile road travel. Currently in place under the guise of a number of different road programs, this technology could easily be switched towards a pay-as-you-go system thereby making up for any potential loss of fuel taxation when the crossover from oil-based fuel vehicles to electric-based vehicles does eventually happen.

While officially governments around the world are seen to support the introduction of environmentally friendly electric vehicles, is this the case in reality?