Paul Baxter (pictured above), CEO of The Green Insurer, has called for the UK government to consider scrapping or reducing the 12% Insurance Premium Tax (IPT) on car insurance for electric vehicles (EVs) as a measure to encourage wider adoption of environmentally friendly vehicles.
Speaking on the topic, Baxter highlighted research conducted by The Green Insurer, which found that 36% of motorists would be more likely to switch from petrol or diesel vehicles to EVs if the IPT were removed.
Baxter pointed to ongoing tensions between the car industry and the Government over emissions targets. Manufacturers currently face penalties for failing to meet zero-emission sales targets, which require 22% of car sales and 10% of van sales to be zero-emission vehicles in 2023, with those figures set to increase to 28% and 16%, respectively, in 2024.
Labour’s commitment to reinstating a ban on the sale of new petrol and diesel cars by 2030 underscores the urgency of making EVs a more affordable option, Baxter said.
He noted that while IPT has doubled over the past decade – from 6% to 12% – and raised £8.15 billion for the government last year, reducing or eliminating the tax could provide a much-needed incentive for drivers to adopt EVs.
“By getting more new electric cars on the road we are building a stock of greener used vehicles for the future. This issue is just too big to be caught up in party politics. Whatever fiscal issues the government faces, scrimping on the environment is just something that we cannot afford,” Baxter said.
The Green Insurer’s research further revealed financial concerns as key barriers to EV adoption. While 60% of respondents cited the higher upfront cost of EVs compared with petrol or diesel models as a major deterrent, other financial considerations included the anticipated cost of battery replacement (52%), servicing costs (34%), and the perception that electric car insurance premiums may be higher (23%).
Baxter concluded by calling for bipartisan action to address these obstacles, emphasising that the push for EV adoption should transcend party politics.
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