Panic for Labour as country’s disastrous pay-per-mile policy exposed – ‘petrol is cheaper’
Drivers in New Zealand pay more per mile to drive EVs than petrol vehicles, an expert says.
An electric vehicle excise duty (eVED) is to be introduced from April 2028 (Image: Getty)
New Zealand’s pay-per-mile policy for electric cars has prompted a warning that pursuing a similar scheme in the UK would “risk” a collapse in EV sales. Gideon Salutin from the Social Market Foundation (SMF) think tank advised ministers to look to Iceland for an example of a country which has seen a more successful road-pricing scheme.
Analysis by the think tank shows that for every 100km travelled in New Zealand, electric vehicle (EV) owners pay £3.27 (about NZ$7.60) compared with £2.79 (NZ$6.50) for petrol. Mr Salutin said: “It ends up being cheaper to drive a petrol car than electric.”
The analysis comes after the Government announced plans for an electric vehicle excise duty (eVED) to be introduced from April 2028. Chancellor Rachel Reeves confirmed in the Budget that EV drivers will be charged 3p per mile.
Mr Salutin told the Telegraph New Zealand saw a “significant” drop in EV sales when road-pricing was brought in, though the end of electric vehicle state subsidies had a greater impact.
He said despite that, there was still a “real risk” in pay-per-mile approaches for EVs and such schemes had to be done right.
The SMF senior researcher pointed to Iceland as a country which has enjoyed greater success, recording the highest growth in EV sales in Europe.
Icelanders already had a “good” distribution of EV charging points and confidence in the vehicles while the Icelandic government ensured there was a difference in petrol car fuel duty charges and road-pricing.
UK Government efforts to reform how vehicles are taxed come as it continues to pursue plans to outlaw sales of new petrol and diesel cars and vans from 2030. Only zero-emission models will be permitted from 2035.
Earlier this month analysis from the Energy and Climate Intelligence Unit (ECIU) think tank found Britain’s car industry will meet the Government’s EV sales requirement for this year.
The mandate’s headline target is for at least 28% of cars sold by each manufacturer to be zero-emission, which generally means pure battery electric.
Figures from the Society of Motor Manufacturers and Traders showed such vehicles achieved a market share of 22.7% during the first 11 months of the year.
But the ECIU said the actual Zev mandate sales requirement is just 20.4% as companies also get credit for selling large numbers of lower emission petrol and diesel cars.
The think tank’s head of transport Colin Walker said: “Despite claims that sales targets would not be hit, it seems clear that in 2025, just as last year, the industry is on track.
“British drivers are increasingly choosing to switch to electric, so much so that, of the world’s largest car markets, the UK is now second only to China in the proportion of drivers buying new EVs.
“Be they new cars or regular families going electric on the second-hand market, British EV drivers are saving hundreds, even thousands, of pounds a year.”
