Is the Government about to U-turn on ‘Tesla Tax’ to Boost EV Sales?

Another U-Bend looming?

The Government is planning to scrap the so-called ‘Tesla Tax’ on new electric vehicles (EVs) after warnings that it’s putting buyers off and slowing down EV adoption.

A leaked letter from Roads Minister Lilian Greenwood, seen by some media, confirms that changes are being considered for the next Budget. The current rule adds an extra tax on any new car that costs more than £40,00.

However the Government now says this policy unfairly affects buyers of zero-emission cars and could be changed or removed.

The extra charge, known officially as the Expensive Car Supplement (ECS), was originally introduced in 2017 for petrol and diesel cars. It adds £425 a year on top of standard car tax, which adds up to more than £3,000 over five years.

Applying the ECS to EVs was part of a broader change announced in a previous Budget, but it’s already faced heavy criticism. Car makers say the rule discourages people from buying electric cars, especially as many cost more than £40,000. Auto Express recently estimated that 7 in 10 new EVs sold in 2025 will be hit by the charge.

Some manufacturers have already dropped their EV prices to just under the £40,000 mark to help avoid the tax – even though it means losing money on each car. Brands like Vauxhall and Abarth have already done this to attract more private buyers.

Greenwood’s letter says the Government will now “consider raising the threshold for zero-emission cars” in future to make them more affordable.

Industry leaders say this move is a good first step but doesn’t go far enough. They argue the UK’s current EV sales targets are unrealistic and the penalties for missing them are too harsh.

Robert Forrester, CEO of car dealership group Vertu, said: “It’s a start, but only part of the solution.” He said high costs, lack of incentives, and poor public charging options are still major barriers.

“People without driveways, especially in cities, are being charged as much as 85p per kWh to charge publicly. That makes switching to electric really difficult,” he said.

We will wait and see.

Share:

More Posts

tesla-debuts-new-model-3

Tesla Second Quarter 2025 Units

In Q2 Tesla produced over 410,000 vehicles, delivered over 384,000 vehicles and deployed 9.6 GWh of energy storage products. Tesla just released its production and delivery report for Q2 2025, and it confirmed that it delivered 384,122 electric vehicles during the quarter: Q2 2025   Production Deliveries Subject to operating lease accounting Model 3/Y 396,835

tesla Uk

June 2025 Tesla UK Prices

Tesla Model 3 pricing remain unchanged during June 2025, making 25 months of no increase to UK retail pricing. Tesla is offering some great 0% finance offers of PCP and HP with monthly prices starting at just £249. Also Stealth Grey and Solid Black are the new While at no additional cost. White, Black and

april 2025

June Solar Production

500 kWh Produced in June 2025 – Summer sun shine. As the UK warms up for summer, June brings us 500 kWh os solar production. This June was very similar to June 2024 with 500 compared to 512 kWh and both below 2023 with over 600 KWh. We exported 34% or 167 kWh back to

WWDC

WWDC Announcement summary

WWDC for developers Apple has introduced the Foundation Models Framework and system-level APIs, allowing developers to integrate AI features directly into apps without needing to send data to external LLM providers. This approach focuses on tight integration and consistency across its devices. All supported iPhones, iPads, and Macs will share a common AI interface, although

Send Us A Message