LONDON, Dec. 15 (Xinhua) -- Britain's plan to impose a mileage-based tax on electric vehicles (EVs) has revived debate over how countries should finance transport infrastructure in a net-zero transition, and whether charging EV users too early risks slowing the shift policymakers aim to accelerate.
Under the proposal in the 2025 Autumn Budget, drivers of battery-electric vehicles would pay around 3 pence per mile from 2028. The British government says the measure reflects a changing tax base as fuel duty is set to fall with the decline of petrol and diesel sales. Officials argue that road users should contribute on a more consistent basis regardless of vehicle type.
The announcement comes as Britain's auto industry increases investment in electrification and battery supply chains amid softening domestic demand, higher operating costs and new trade pressures, prompting questions about whether policy timing aligns with market conditions.
REPLACING FUEL DUTY
Fuel duty has long funded Britain's transport network. As more drivers switch to zero-emission vehicles, that revenue source is shrinking. Policymakers warn that without reform, it will become harder to maintain roads and build the charging infrastructure essential for wider EV adoption.
Amin Al-Habaibeh, professor of smart engineering systems at Nottingham Trent University, said industry has anticipated "a more normal tax regime" as EV uptake grows. He described mileage-based charging as "an early step" toward a road system in which all users contribute to ongoing costs.
He added that EVs are still likely to remain cheaper for many drivers over time, particularly when considering fuel, maintenance and urban charges. He does not expect the levy to "significantly slow" the net-zero trajectory in the long run, although it may influence decisions for high-mileage users or those without home charging facilities.
TOO SOON FOR A FRAGILE MARKET
Industry groups argue that the timing increases risk, as consumer demand has cooled after several years of rapid expansion.
According to the Society of Motor Manufacturers and Traders (SMMT), Britain's new car registrations fell 1.6 percent year-on-year in November, with private demand down 5.5 percent.
Battery-electric registrations rose 3.6 percent, lifting market share to 26.4 percent from 25.1 percent a year earlier. However, it is the slowest battery-electric growth in nearly two years and short of the government's 28 percent target for 2025.
David Bailey, professor of industrial strategy at the University of Birmingham, said a road-pricing system is "inevitable long term," but warned that introducing it now risks undermining confidence.
"Bringing in a charge on EVs now conflicts with the objective of increasing take-up," he told Xinhua, adding that it will "certainly delay" switching and complicate achieving the 2030 and 2035 emissions goals.
Bailey said that if not clearly explained and phased, the levy may be perceived as "a tax grab," particularly when other incentives are also under review.
Steven Smith, Impact Fellow at the Global Systems Institute of the University of Exeter, said the announcement "sends the wrong signal at the wrong time." He told Xinhua that the transport sector's net-zero goal "is at risk of being missed" if policy signals prompt hesitation.
Smith argued that maintaining momentum depends on ensuring zero-emission travel becomes "the most affordable and convenient option," especially regarding upfront cost and access to fast charging.
Britain's budget watchdog, the Office for Budget Responsibility, projected that the measure could lead to hundreds of thousands fewer EV sales than previously forecast, even after extended grants are taken into account.
TAXES AT HOME, TARIFFS ABROAD
The debate unfolds as Britain's auto sector encounters external challenges, particularly in the United States, a major market for British premium and sports car exports.
Bailey noted that British-built cars entering the United States benefit from a 10 percent tariff only for the first 100,000 vehicles a year, after which the rate rises to 25 percent.
"Jaguar Land Rover will gobble up most of the quota," he said, leaving smaller manufacturers, such as Aston Martin, Mini or Morgan, uncertain whether their shipments will face 10 percent or 25 percent.
He pointed to recent job cuts at Aston Martin and earlier at Lotus as examples of manufacturers adjusting in response to this changing environment. When domestic demand softens due to taxation while export conditions become less predictable, Bailey said it creates "a double burden -- an added headwind to the auto industry in Britain."
"Tax is part of the transition -- you can't pretend otherwise," Bailey said. "But if you get the timing and design wrong, you risk slowing the very transition you're trying to fund."
Analysts say how Britain balances road charges, trade pressures and consumer confidence will determine whether the EV levy becomes a sustainable model for funding infrastructure -- or introduces friction at a pivotal stage in the country's transition toward zero-emission transport. ■
