Electric car boom puts many countries in trouble

Electric cars are on the advance worldwide . Especially in countries with a well-developed charging infrastructure. Government (purchase) incentive programs are high on the agenda for electric vehicles. However, the growing popularity also presents governments with new challenges, as a look at the UK shows. However, the effects described here as examples apply to many countries in which the share of electric cars is rising sharply.

Tax revenues collapse

The soaring sales of electric cars are expected to cost the British government several billion pounds in tax revenue over the next few years. Instead of a car share of 16.4 billion. Pounds (currently just under 20 billion. Euros) in fuel tax in 2019, the Ministry of Finance could only raise 11.4 billion euros in 2028. Pounds, according to a study published Tuesday by the RAC Foundation. That would be almost a third less.

Electric cars continue to grow

The analysis predicts a further sharp rise in the share of purely electric cars. The share of diesel vehicles in new registrations in the UK collapsed in 2021. In turn, the share of e-cars climbed by leaps and bounds, figures from industry body SMMT show. From 2030, no more internal combustion vehicles will be allowed to be registered. Fuel tax accounts for almost 58 pence per liter of gasoline or diesel in the UK.

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Finance minister faces dilemma

Which is expecting losses of around 5 billion. Pounds is roughly equivalent to the amount spent annually on operating, maintaining and upgrading freeways and major roads in the largest part of the country, England, according to the RAC Foundation. Finance Minister Rishi Sunak faces a dilemma, says the organization's chief executive, Steve Gooding. It is possible to increase taxes such as the fuel tax and the Vehicle Excise Duty. But this will hit poorer drivers harder than wealthy ones. An alternative would be a toll, but the introduction would be extremely complicated.

Situation in Austria

In Austria, the loss of revenue from the mineral oil tax is compounded by the fact that electric cars are not subject to the NoVA tax. In addition, owners of electric-only vehicles do not have to pay motor-related insurance tax. The tax revenue that comes in from the electricity needed to charge them doesn't cover that by a long shot. But governments in the countries concerned are sure to come up with ways to make electric car drivers pay more in the future.

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