General Insurance Article - Scrapping IPT would boost EV switch

 “Our research shows 36% of motorists would be encouraged to replace their current petrol or diesel vehicle for an electric model if the 12% Insurance Premium Tax were to be removed on car insurance for electric vehicles.

 “The row between the car industry and the Government centres on the penalties imposed on manufacturers for every sale of a car that is not zero emission outside targets of 22% of car sales and 10% of van sales this year with the targets rising to 28% and 16% respectively next year.

 “Labour’s commitment to reinstating the 2030 ban on the sale of new petrol and diesel cars is laudable, but it’s clear that there remains a real need to make EVs a more affordable choice for many drivers.

 “IPT is a tax that’s added to all general insurance premiums and is set and controlled by the Government. In the last decade it has doubled from 6% to 12%, and it raised £8.15 billion for the Government last year. Clearly giving up revenue in the current climate will be tough but more short-term action is needed to help accelerate EV take-up.

 “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.”

 The Green Insurer’s research shows 60% motorists cited the higher cost of EVs compared with petrol or diesel models as a reason for not considering an electric or hybrid vehicle for their next car purchase. Other financial reasons for not making the switch to an EV include the future cost of replacing the battery (52%); concerns around the cost of servicing (34%) and a belief that electric car insurance premiums could be higher (23%).