Despite being enacted in April 2025, a controversial tax on electric vehicles in the United Kingdom appears to already be on the chopping block.
As This is Money reported, lawmakers have already begun to feel the pressure from EV manufacturers in the U.K. regarding the Expensive Car Supplement.
According to the so-called "Tesla Tax," car buyers must pay hundreds of extra pounds for any vehicle that costs over £40,000 (about $54,000).
First enacted in 2017, the tax previously only applied to gas-powered vehicles. In April, EVs were included in the ECS to add a level of fairness.
However, that move has been met with backlash, with EV manufacturers blaming the tax for declining sales. Some manufacturers have even floated the idea of shying away from EV production, which would greatly impact net-zero policies already in place.
This is Money noted that a Labour minister wrote a letter to the government urging a quick fix to the growing sales problem. According to a Driving Mobility for Europe report, while EV ownership has still shown signs of growth, the rate of growth has slowed in recent months.
Lilian Greenwood, parliamentary under-secretary of state for future of roads, has reportedly signaled a desire to reverse the decision to include EVs in the ECS.
"We will consider raising the threshold for zero emission cars only at a future fiscal event to make it easier to buy electric cars," Green wrote in a letter, per This is Money.
This apparent 180-degree turn has led to a number of top car companies applauding the decision, saying that it is "a move in the right direction," per the publication.
While the reversal likely wouldn't take effect until the next Budget in the fall, it may help give EV sales a much-needed shot in the arm.
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Cost 💰 Robert Forrester, chief executive of the UK car dealer group Vertu, noted the impact that the change could have.
"It's a start. But it only takes us part of the way," Forrester told This is Money. "Retail customers were failing to buy EVs in the numbers needed to make a difference."
Even Tesla, which often leads in EV sales, saw its sales numbers dramatically decrease in the first quarter of 2025. Along with the other issues, the company has struggled to shake the bad publicity that it has received because of CEO Elon Musk's political involvement and polarizing views.
Despite this, used EV sales have continued to see record numbers across the world. Many car buyers have taken advantage of the much-improved EV batteries and lower maintenance costs.
To get even more bang for your buck, you can install solar panels on your home in order to charge your EV. Using EnergySage's free tools is a simple way to compare quotes from local installers and save up to $10,000 on solar installations.
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