The Chancellor is set to lose out on billions

[StuartT]

Fuel duty raises billions of pounds for the Chancellor of the Exchequer and as more and more evs are being sold, the revenues are on a downward spiral. This begs the question, how will the shortfall be replaced?
I've read articles saying it will be road charging and now that cars are becoming far easier to track, it seems plausible to me.
If truth be told, I've no idea and I'm just putting it out there. All I do know is that they'll want to get the money from somewhere.

[Scratch]

Fuel duty raises billions of pounds for the Chancellor of the Exchequer and as more and more evs are being sold, the revenues are on a downward spiral. This begs the question, how will the shortfall be replaced?
I've read articles saying it will be road charging and now that cars are becoming far easier to track, it seems plausible to me.
If truth be told, I've no idea and I'm just putting it out there. All I do know is that they'll want to get the money from somewhere.

We may find out on Wednesday. I suspect they will initially impose an annual road fund license for EVs. The infrastructure isn't really available for road pricing yet, in most of the UK.

[de g.]

It is an inevitability.

EVs address a couple of the issues we currently have: carbon, and local air pollution. Even the former is contentious depending on how the electricity is generated. What EVs aren't is a panacea for all transport problems, one of the biggest is the sheer number of vehicles on the road. Current taxation and parking regimes (free parking in Leeds City Centre!) for EVs are effectively encouraging single-occupancy user journeys, and this just isn't sustainable in the long term.

[epicwinningmaz]

Had anyone done a comparison of fuel duty vs the amount of money lost to fossil fuels in terms of subsidies, propping up the industry and damage?

[Utumno]

Road pricing isn't terribly convincing as a solution to me, it seems complex, costly and unreliable.

I'd suggest that the Exchequer will simply mandate that public chargers have a "EV Fuel Duty" slapped on every kW, and that home charging has a similar duty applied per kW by the electricity provider. This is pretty simple to do - the tech is already in the chargers - and people like Octopus are already doing "Intelligent" tariffs that basically do this in reverse. My own cynical take on this is that companies like Ionity are already charging what they think the price including duty will be, and are using this period of "no duty" to fund network expansion (or profit, depending ).

Thus the Treasury still gets its Fuel Duty eventually, it's just that the fuel happens to be electrons rather than hydrocarbons and duty will start being charged once the public infrastructure is up to snuff over time, and the technologies joined up to differentiate home electrons for vehicle versus everything else.

(For those then saying "but what about Granny chargers" etc; there will always be duty avoidance )

[Scratch]

Road pricing isn't terribly convincing as a solution to me, it seems complex, costly and unreliable.

I'd suggest that the Exchequer will simply mandate that public chargers have a "EV Fuel Duty" slapped on every kW, and that home charging has a similar duty applied per kW by the electricity provider. This is pretty simple to do - the tech is already in the chargers - and people like Octopus are already doing "Intelligent" tariffs that basically do this in reverse. My own cynical take on this is that companies like Ionity are already charging what they think the price including duty will be, and are using this period of "no duty" to fund network expansion (or profit, depending ).

Thus the Treasury still gets its Fuel Duty eventually, it's just that the fuel happens to be electrons rather than hydrocarbons and duty will start being charged once the public infrastructure is up to snuff over time, and the technologies joined up to differentiate home electrons for vehicle versus everything else.

(For those then saying "but what about Granny chargers" etc; there will always be duty avoidance )

Surely your suggestion can only work if people use a specific tariff for home charging? We can't have a smart meter as they haven't implemented the WAN network required to enable smart meters to take half hourly readings in our neck of the woods. Which means we pay our standard KWh price for both our house and the car.

[Utumno]

Road pricing isn't terribly convincing as a solution to me, it seems complex, costly and unreliable.

I'd suggest that the Exchequer will simply mandate that public chargers have a "EV Fuel Duty" slapped on every kW, and that home charging has a similar duty applied per kW by the electricity provider. This is pretty simple to do - the tech is already in the chargers - and people like Octopus are already doing "Intelligent" tariffs that basically do this in reverse. My own cynical take on this is that companies like Ionity are already charging what they think the price including duty will be, and are using this period of "no duty" to fund network expansion (or profit, depending ).

Thus the Treasury still gets its Fuel Duty eventually, it's just that the fuel happens to be electrons rather than hydrocarbons and duty will start being charged once the public infrastructure is up to snuff over time, and the technologies joined up to differentiate home electrons for vehicle versus everything else.

(For those then saying "but what about Granny chargers" etc; there will always be duty avoidance )

Surely your suggestion can only work if people use a specific tariff for home charging? We can't have a smart meter as they haven't implemented the WAN network required to enable smart meters to take half hourly readings in our neck of the woods. Which means we pay our standard KWh price for both our house and the car.

Yes, but it doesn’t have to be implemented over the smart meter network (Octopus Intelligent isn’t).

Instead the EV charge point software reports the number of kW delivered to an EV, and the electricity company applies the duty. Or the car could, or both.

Every current “smart” charger does all of this already except link back to HM Treasure, so it seems a small step to simply charge a surcharge on the juice you put in the battery versus the duty paid at the pump.

Of course nobody knows what’ll happen, I’m just throwing this out there!

[Andreas]

Important to remember that electricity is heavily taxed as well.

I expect road charging, first in the form of the ULEZ for polluting vehicles, to be used more heavily as well.

All the best

Andreas

[Splitty]

Instead the EV charge point software reports the number of kW delivered to an EV, and the electricity company applies the duty. Or the car could, or both.

Every current “smart” charger does all of this already except link back to HM Treasure, so it seems a small step to simply charge a surcharge on the juice you put in the battery versus the duty paid at the pump.

This would be so easy to defeat and the public source EVSE chargers don't support this either. There are many home brew chargers out there and you could even wrap the thing in bacofoil to stop the cellular connections.

[Scratch]

Instead the EV charge point software reports the number of kW delivered to an EV, and the electricity company applies the duty. Or the car could, or both.

Every current “smart” charger does all of this already except link back to HM Treasure, so it seems a small step to simply charge a surcharge on the juice you put in the battery versus the duty paid at the pump.

This would be so easy to defeat and the public source EVSE chargers don't support this either. There are many home brew chargers out there and you could even wrap the thing in bacofoil to stop the cellular connections.

I can see bacofoil panic buying very soon.

[Utumno]

Instead the EV charge point software reports the number of kW delivered to an EV, and the electricity company applies the duty. Or the car could, or both.

Every current “smart” charger does all of this already except link back to HM Treasure, so it seems a small step to simply charge a surcharge on the juice you put in the battery versus the duty paid at the pump.

This would be so easy to defeat and the public source EVSE chargers don't support this either. There are many home brew chargers out there and you could even wrap the thing in bacofoil to stop the cellular connections.

There’s plenty of ways around everything. I still suspect it’s more cost-effective to do this or something like it as a stepping stone toward the driver nightmare that road pricing will represent. I wouldn’t be at all surprised to find that at some point in the next few years the UK’s EV homologation process mandates charging history uploads from the car’s cellular connection without the user being able to soft block it.

Good luck wrapping your vehicle in Bacofoil.

[Splitty]

Instead the EV charge point software reports the number of kW delivered to an EV, and the electricity company applies the duty. Or the car could, or both.

Every current “smart” charger does all of this already except link back to HM Treasure, so it seems a small step to simply charge a surcharge on the juice you put in the battery versus the duty paid at the pump.

This would be so easy to defeat and the public source EVSE chargers don't support this either. There are many home brew chargers out there and you could even wrap the thing in bacofoil to stop the cellular connections.

There’s plenty of ways around everything. I still suspect it’s more cost-effective to do this or something like it as a stepping stone toward the driver nightmare that road pricing will represent. I wouldn’t be at all surprised to find that at some point in the next few years the UK’s EV homologation process mandates charging history uploads from the car’s cellular connection without the user being able to soft block it.

Good luck wrapping your vehicle in Bacofoil.

Well, you don't need to wrap your car in bacofoil, just the EV charger, besides, there are so many not spots that you could not possibly base a road tax system on this. And let's not forget solar EV charging, are you going to tax me for using sunlight??. The technology just isn't in place nor will it be and it is not enforceable (bacofoil or even remove SIM card from charger). The only solution is a road charging system which will also be fairer for all types of vehicle (BEV, PHEV, ICE, Bikes etc etc). And regards upload from the car, why would VW, TEsla etc do something special for just the UK????

[Utumno]

Just expressing an opinion. I certainly don’t have a fully costed solution, just that road pricing seems complex and costly to me.

What makes you think these changes would be specific to the UK market? The globe is facing the same challenges.

It’s interesting you assert that road pricing is “fairer”. How so? And fairer than what? And to whom?

[Splitty]

If you use a public resource such as a road you should expect to pay for its upkeep and future development, otherwise we will end up with dirt tracks. Everyone who uses a resource should contribute to its development and upkeep, the more you use it the more you should contribute. Right now cyclists, EV drivers and others don't contribute at all, I drive around 6000 miles per year, why should I pay the same as someone who does 15,000 or 30,000 miles per year or who drives a large heavy van?Some sort of classification like weight and distance travelled might be a fairer system than charging by the amount of CO2 a vehicle spews out.

And why did I think the UK? You said the that chargers log the use except having a link back to "HM Treasury" and you mentioned the "UK’s EV homologation process ". I simply responded to your suggestion that you were proposing a UK solution, the idea that all nations would agree on a common road charging scheme is also a bit difficult to imagine. And Car manufacturers might be persuaded to do something special for the UK, but at a price and it would not include legacy vehicles.

Right now there are plenty of insurance companies that have in car monitoring and it's not a huge leap to see how the same idea might be extended to road use charging, much more difficult to hack than relying on EV chargers and the same system could be used for all vehicles, not just BEV's.

[StuartT]

"Right now there are plenty of insurance companies that have in car monitoring and it's not a huge leap to see how the same idea might be extended to road use charging, much more difficult to hack than relying on EV chargers and the same system could be used for all vehicles, not just BEV's"
I was thinking along those lines as well. The biggest problem I can think of is collecting the revenue. People are used to paying their dues, every time they fill up with fuel; I don't think asking people to set up a monthly direct debit will be well received (unless there's other ways I haven't thought of? Probably...)
It's all above my pay grade and mental capacity, for me to lose too much sleep over it!

[365allthetime]

Road pricing isn't terribly convincing as a solution to me, it seems complex, costly and unreliable.

I'd suggest that the Exchequer will simply mandate that public chargers have a "EV Fuel Duty" slapped on every kW, and that home charging has a similar duty applied per kW by the electricity provider. This is pretty simple to do - the tech is already in the chargers - and people like Octopus are already doing "Intelligent" tariffs that basically do this in reverse. My own cynical take on this is that companies like Ionity are already charging what they think the price including duty will be, and are using this period of "no duty" to fund network expansion (or profit, depending ).

Thus the Treasury still gets its Fuel Duty eventually, it's just that the fuel happens to be electrons rather than hydrocarbons and duty will start being charged once the public infrastructure is up to snuff over time, and the technologies joined up to differentiate home electrons for vehicle versus everything else.

(For those then saying "but what about Granny chargers" etc; there will always be duty avoidance )

Surely your suggestion can only work if people use a specific tariff for home charging? We can't have a smart meter as they haven't implemented the WAN network required to enable smart meters to take half hourly readings in our neck of the woods. Which means we pay our standard KWh price for both our house and the car.

Yes, but it doesn’t have to be implemented over the smart meter network (Octopus Intelligent isn’t).

Instead the EV charge point software reports the number of kW delivered to an EV, and the electricity company applies the duty. Or the car could, or both.

Every current “smart” charger does all of this already except link back to HM Treasure, so it seems a small step to simply charge a surcharge on the juice you put in the battery versus the duty paid at the pump.

Of course nobody knows what’ll happen, I’m just throwing this out there!

I just looked on the octopus intelligent and it says you need a smart meter? Unless I’m misreading

[Utumno]

All interesting perspectives, thanks!

[Splitty]

The treasury raised £28 billion from fuel duty in 19/20 and on top of this there was VAT on top of the fuel. Then the road fund license (which we know isn't spent exclusively on roads) adds extra to the pot estimated to be north of £40 billion which represents about 5% of government revenue. So these taxes will need replacing. We as BEV drivers don't pay any of these right now which is a good incentive to get people to go electric, but as the OP pointed out this isn't sustainable. The Institute of fiscal studies (the IFS) suggests:

• The government needs to rethink how it taxes motoring. It should
  start now, before the revenue disappears and expectations of low-tax motoring
  become ingrained. It should lay out how it plans to tax low-emissions driving in the long
  term whilst incentivising the take-up of lower-emissions cars in the short term.

• A system of road pricing where charges vary by time and location is the best way
  to incorporate the costs of congestion into the prices paid by drivers. Such systems
  are technologically feasible and are used in a number of cities worldwide. Failing that –
  or, better, as a stepping stone towards it – the government could introduce a flat-rate
  tax per kilometre driven, which would at least continue to raise revenue and discourage
  driving once alternatively fuelled vehicles replace petrol and diesel ones.

While this isn't government policy, road pricing seems to be the preferred method, how the govt will enable this is still open for debate.

In other news:
In the near future many BEV's will offer two way battery functions, to be charged and to discharge to the grid much like a tesla Powerwall, making a car based system even more complex and therefore no need for Bacofoil....
Also did you clock the fact that Octopus have a Tesla/PV tariff? If you have a powerwall and a solar array, they will only charge you £0.11/Kwh and pay you £0.11/Kwh for any excess solar. They use your powerwall as grid storage like the two way charging feature above.

[Smitten]

Road pricing is used throughout Norway. Zero emission vehicles get a 50% to 100% discount in many places - but not all. You pay monthly by miles driven and vehicle type with the most polluting paying the most and so on. The system is call Autopass and each vehicle has a small electronic toll tag fixed in the windscreen which is picked up by the automated toll stations as you pass them. Also works for most ferries (and many of these are electric as well). To me it seems very fair and I would be happy to pay by use in the UK. Seems like a sensible approach for the UK as well with our crowded road system as you could have time of use tariffs like we do with electricity to spread traffic load for example. Might also help spread the load on the charging network.

www.autopass.no/en/payment/zeroemissionsvehicles

[Splitty]

Road pricing is used throughout Norway. Zero emission vehicles get a 50% to 100% discount in many places - but not all. You pay monthly by miles driven and vehicle type with the most polluting paying the most and so on. The system is call Autopass and each vehicle has a small electronic toll tag fixed in the windscreen which is picked up by the automated toll stations as you pass them. Also works for most ferries (and many of these are electric as well). To me it seems very fair and I would be happy to pay by use in the UK. Seems like a sensible approach for the UK as well with our crowded road system as you could have time of use tariffs like we do with electricity to spread traffic load for example. Might also help spread the load on the charging network.

www.autopass.no/en/payment/zeroemissionsvehicles

Looks like a great option and should work well, like the time of use idea