Researchers See Drive Distance Pricing as Way of Filling Electric Cars' Fuel Duty Hole

By Gary Cutlack on at

The Institute for Fiscal Studies may sound like it's the government but it isn't, so don't worry too much if you're thinking about making a cheap Hyundai electric car your next car. The IFS does, however, carry some clout, so its idea that future taxation of road use should cover "distance driven" is hitting the desks of people important enough to make it happen. They could pass this idea off as their own 2019 general election policy, and also 2020 and 2021's general election policy too. Hey, it's like James O'Malley never left.

There are two problems the IFS says a per-mile road taxation structure would tackle; the drop of tax revenue that'll come about when/if we all switch to electric cars, plus the matter of congestion at peak times that won't go away simply because cars start going Neeee instead of Vroom. Time of trip as well as distance driven could be used to calculate the per-mile cost as well, meaning you might want to stay at work for an extra half an hour because it'll be cheaper to drive home off-peak, not just because the office internet is faster and home makes you sad.

The IFS says a new road taxation regime needs to come in sooner rather than later too, as the current owner expectation of buying an EV is that it's free to tax; and once more people are driving them, suddenly hitting EV owners with a fresh new charge may incite public ill-feeling.

Rebekah Stroud from the IFS said: "The bigger challenge is that revenues are now set to disappear entirely over coming decades as we transition to electric cars. The government should set out its long-term plan for taxing driving, before it finds itself with virtually no revenues from driving and no way to correct for the costs – most importantly congestion – that driving imposes on others." [IFS via Guardian]

Image credit: Unsplash