Are the Government going to adjust the luxury car tax on Electric Vehicles

Luxury car tax on Electric Vehicles - are the government making adjustments?

The pressure on the Government to help customers move into battery vehicles is mounting. While the ZEV Mandate is a legal and political agenda which is driving the change, there is an expectation that the Labour Government will ensure that the economic environment is constructed properly enough to allow the changes to take place.

This cannot simply be an obligation on the vehicle manufacturers or customers to buy or lease a new /used EV without any real support through the policy. Before 1 April 2025, the Government supported EVs in various ways because they emitted no tailpipe emissions; in particular there was no VED / road tax applicable to those vehicles emitting 0g/km of CO2.

The whole automotive agenda was focused on carbon and emissions reduction, so that towns and cities could start to become a cleaner and greener environment for those living and working there. While these did not represent massive cost-savings, the show of faith from the Government did at least demonstrate an underlying support for BEVs. By making these vehicles exempt from punitive charges, there was another good reason to make the transition.

However, new rules were proffered for 1 April 2025 and beyond, with new tax impositions for new or used EVs. While debated amongst the political and quasi-political bodies, the changes did come and new rules relating to zero-emission vehicles were brought in.

Quite disappointingly there were incremental charges placed on existing EVs with new vehicles also incurring the punitive “Additional Rate” applied to what the legislation considers as an expensive car, see UK Government website. In Summary:

• EVs registered between 1 March 2001 and 31 March 2017 pay the yearly low rate - £20;
•  EVs registered between 1 April 2017 and 31 March 2025 pay the yearly standard rate - £195;
• EVs registered after 1 April 2025 pay the yearly standard rate - £195 and the lowest first year rate of £10; and
•  EVs registered after 1 April 2025 with a List Price exceeding £40,000 pay an expensive car supplement from the start of the 2nd year until the end of the 7th year (this is a 5 year obligation) - £410

However, there is a growing dissatisfaction with the changes, as many car dealerships and manufacturers noting that this new approach is having a detrimental impact on sales and is setting the wrong impression about the future of zero-emission driving.

So much so that there are admissions that the Government are having to review the latest policy on road tax with a view to either re-abolishing it or making changes to the thresholds. The obvious change is the definition of what we say is a “luxury vehicle” as this is currently set at £40,000.

To be clear, the reference is the list price, being the brand’s recommended retail price before any discounts or charges. So while there are supportive mechanisms and enhanced discounts for EVs, this does not assist with the list price reference. So even if the car’s OTR would be below the threshold after the discounts, this does not matter with how list price is calculated and therefore the application of the road fund licence.

The easiest way to manage this in the short-term, would be for the government to re-define what luxury really constitutes in terms of value i.e. £70,000 / £80,000 / £90,000? This is not a wholly objective concept and some consideration is needed before making a clear decision.

Introducing the new Alpine A390 EV Lease Deal

The Alpine brand will certainly be watching this with considerable enthusiasm as they look to release another exciting performance EV to the UK market. The upcoming A390 will be the group’s 2nd innovation, to follow their incredibly successful A290 hatchback option.

The new 5-door fastback A390 is looking to follow the traditional A110, which was renowned for agility and performance. The “soul of Alpine” is now available on the Alpine manufacturer website with the pre-ordering now open. The A390 will be delivering a thrilling drive with 3 electric motors, an AWD system and the Active Torque Vectoring (ATV).

On the GT, the total 89kWh battery will offer 400bp and 0- 62mph times of 4.8 seconds and in the GTS will offer 470hp 0 - 62mph times of 3.9 seconds yet still deliver a 300 mile+ range. Manual preconditioning is available on each car to ensure battery efficiency and experience.

The two rear motors offer independent wheel control which is where the ATV comes in. The active torque variation system relies on a difference in longitudinal forces between the two wheels on the same rear axle, notably by delivering more torque to the outer wheel: this results in natural yaw torque around the vehicle's vertical axis. The result is unparalleled dynamism and agility.

Supporting by ESC and traction control, this is a vehicle which can handle the demands placed upon it. Inside the EV, there is an Overtake Function which is a red button you press to deliver up to 10 seconds of additional power. Plus a launch control function means that in Sport mode you have immediate performance.

Where Alpine are leading the charge, is with their French-built batteries and chemistry. While a 400V battery architecture (not the 800V like other main competitors) the vehicle can still enjoy 190kW DC charging, which means a 25 minute session for 15% to 80%.

While standard with the 11kW AC charger for 8 hours charging or upgrade to the 22kW onboard charger for 4 hours 0 - 100% charging sessions. The WLTP quoted range is around 345 miles, so expect this to produce a real world range of 300 miles - the integrated heat pump helps maintain this. Bidirectional charging is present via the V2L (vehicle to load) and V2G (vehicle to grid).

The EV is set to be well-specified with a choice of 20” and 21” alloys, Devialet audio system, 12.3” instrument panel, 12” vertical centre screen, Google Maps, Augmented Dashboard, Alpine Telemetrics, sports seats, heated seats, electric seats, 360 degree camera and the optional carbon pack. Colours include Gris Tonnerre, Blanc Topaze, Argent Mercure, Bleu Alpine Vision and Noir Profond. Official pre-ordering of the new A380 EV is set to happen in Q4 2025, with the starting price set to begin at around £55,000 ranging to £65,000 (without any options).

Almost certainly not a cheap car, the Alpine group will still be reviewing the Government decision on luxury tax, as this will influence what personal and business customers leasing decide to do.

Want to know more about going into the electric Alpine A390 in 2025?

Head to our dedicated Alpine special offers section, or just get in touch with our team on 01942 943 214 or by emailing us at [email protected]