More than a third of drivers would switch to electric vehicles if the Insurance Premium Tax (IPT) was scrapped, according to new research.
A new study found that 36 per cent of motorists would be encouraged to replace their petrol or diesel vehicles with electric models if the tax was removed.
The findings come amid growing pressure to accelerate the transition to zero-emission vehicles in the UK.
Currently, drivers face a 12 per cent Insurance Premium Tax on their vehicle insurance, a rate that has doubled over the past decade.
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Experts are calling on the Government to cut the rate of IPT to accelerate electric vehicle sales
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There had been calls from experts for the Government to remove or lower the IPT limit in the Spring and Autumn Statements, although this failed to materialise.
Paul Baxter, CEO of The Green Insurer, is calling for the removal or reduction of IPT on electric vehicles as a practical step to encourage wider adoption.
He said: “Scrapping or reducing IPT on electric vehicles would be a straightforward way to help encourage drivers to make the switch from petrol or diesel cars.”
The call comes as car manufacturers face increasing pressure over electric vehicle sales targets from the Zero Emission Vehicle mandate.
Companies currently face fines for each non-zero-emission vehicle sold, with targets set at 22 per cent of car sales and 10 per cent of van sales this year. These targets are set to rise to 28 per cent and 16 per cent respectively in 2024.
Despite growing interest in electric vehicles, significant barriers to adoption remain.
Research by The Green Insurer revealed that 60 per cent of motorists cite higher purchase prices of EVs compared to traditional vehicles as a major deterrent.
Battery replacement costs are another key concern, with 52 per cent of drivers expressing worries about these potential expenses, while just over one-third are concerned about higher servicing costs.
While IPT raised £8.15billion for the Government last year, Baxter argues that “short-term action is necessary to accelerate EV adoption”.
The Green Insurer CEO emphasised that getting more new electric vehicles on the road would help create a supply of affordable used EVs in the future.
He stressed the importance of prioritising environmental measures despite economic challenges. He added: “This issue is too significant to become entangled in party politics.
“Whatever fiscal challenges the Government faces, scrimping on the environment is simply not an option we can afford.”
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Drivers said they would be more likely to switch to an electric vehicle if IPT was scrapped
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Speaking previously to GB News, a Government spokesperson said: “We’re committed to delivering greener transport by supporting the transition to electric vehicles.
“We will provide certainty to manufacturers by restoring the 2030 phase-out date for new petrol and diesel cars, and are committed to accelerating the rollout of electric vehicle charging infrastructure. We will set out further details in due course.”
