- In response to the changes to electric car vehicle excise duty (road tax) in the UK, which come into effect on the 1st April, Vauxhall has announced price cuts to all electric passenger cars in its range.
- With revised pricing strategy, the prices on all its electric car range (excluding certain versions of the Vivaro Life Electric) will be kept below £40,000, which is set to save some buyers £2,125 in vehicle excise duty over the first few years of new ownership.
- Under the government’s new changes, EVs will no longer benefit from free road tax, while EVs with a retail price above £40,000 will be subject to an additional ‘Expensive Car Supplement’ which is charged for the first five years of ownership from new.
Vauxhall cuts prices in response to VED changes – will other OEMs follow?
These changes to prices will ensure that the vast majority of new Vauxhall EVs will avoid the new expensive car supplement, even on larger more premium models such as the Vauxhall Grandland. Even Vauxhall’s top-specification Grandland Electric, which was previously priced from £40,495, now starts at £39,095.
It’s not just Vauxhall that have cut their EV prices directly in response to these new charges. Elsewhere in the Stellantis group, Abarth recently slashed the starting price of its Abarth 600e performance car by a considerable £2,100 to help the model avoid the expensive car supplement. The average price of a new EV in the UK stands at £48,000, however, which leaves a considerable number of buyers still paying up for this new tax. With Vauxhall’s move here, we’re likely to see other brands follow in the coming months.
There has been considerable opposition from the industry against these tax changes in recent months. Back in February, the UK’s Society of Motor Manufacturers and Traders also called for the so-called luxury tax on £40,000-plus EVs to be scrapped, with its head, Mike Hawes, calling the tax change ‘the wrong measure at the wrong time’. Vauxhall’s Managing Director, Eurig Druce, has also criticised the expensive car supplement for EVs. However, with the changes now confirmed to have taken place, Vauxhall is moving to address the issue for its customers.
Eurig Druce, Managing Director for Vauxhall, commented on the tax changes, and Vauxhall’s steps to address the rise:
“With electric cars no longer exempt from Vehicle Excise Duty, Vauxhall is making electric mobility accessible and affordable for British drivers. The Vauxhall electric car range now sits below the £40,000 Expensive Car Supplement threshold, saving customers some £2,125 in road tax over the first few years of ownership.
The threshold for the Expensive Car Supplement has remained at £40,000 since inception in 2017 despite subsequent high levels of inflation – if it were to have risen with inflation it would now be around £52,000. With the average price of an EV in the UK at around £48,000, this new tax means that customers buying some of the more attainable electric cars on the market are now being penalised whilst at the same time we are trying to move as many British motorists to electric as quickly as possible. The good news is that Vauxhall electric customers are below this new threshold, but we’d urge the government to reconsider this new measure and ensure taxation policies incentivise the majority of drivers to make the shift to electric vehicles.”
