According to the Tony Blair Institute, switching to electric automobiles will result in a £30 billion car tax “nightmare.”
According to a recent study, drivers have been warned that the introduction of electric vehicles could result in a £30 billion hole in the economy.
The Tony Blair Institute for Global Change’s report contained a 30-page document titled “Avoiding Gridlock Britain,” which looked at the future implications of electric vehicles. The government is still pushing through with its plan to prohibit the sale of new gasoline and diesel vehicles starting in 2030.
Electric vehicles currently number roughly 100,000 in the UK, with the number expected to climb to three million by 2025.
By 2030, it is predicted that 10 million EVs will be on the road, with 25 million EVs on the road by 2035, when new hybrid car sales will be prohibited.
In the United Kingdom, automotive taxation is based on fossil fuels and the amount of pollution each vehicle emits.
Electric vehicle drivers do not have to pay a car tax because their vehicles emit no carbon emissions.
According to the Tony Blair Institute, there will be three major ramifications for road users in the coming years.
The first is traffic congestion, which according to some estimates could increase by up to 50%.
It also forecasted a drop in annual gasoline duty receipts, necessitating tax increases elsewhere.
“We are on pace to lose almost £30 billion in revenue, necessitating tax increases of up to 2 pence on income tax by the end of the next Parliament and up to 6 pence by 2040,” the report added.
The Institute’s final “looming nightmare” was the disparity in taxation that will be paid by different social classes.
“Drivers of new BEVs pay 71 percent less in fuel and 98 percent less in tax than owners of petrol or diesel vehicles,” it stated.
“Over the next 15 years, BEV drivers will certainly be drawn primarily from higher-income income deciles who drive newer cars, allowing wealthy BEV drivers to escape paying taxes while ordinary motorists are left to foot the bill.
“And, as things stand, this will exacerbate regional and income disparities, thus contradicting the government’s ostensible goal to ‘leveling up.’
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