As host of COP26, our Government wanted to be seen as “world leaders in reducing CO2 emissions”, and so before the meeting it announced the U.K. would ban the sale of new petrol and diesel cars in 2030. It hoped it could then persuade other countries to follow our lead. It completely failed and no other major country went along with this: Germany, Japan, Italy and China do not propose a ban until 2035, France and Spain do not propose a ban until 2040 and the USA and India are not proposing any ban at all.
It is not hard to see why other countries were so unenthusiastic to inflict this policy on their population. Electric cars are so expensive. For example, Nissan’s basic electric car, the Leaf, has a recommended retail price (RRP) of £26,995, whereas its equivalent petrol car, the Micra, has an RRP of £16,685. The cheapest Tesla is the Model 3, which has an RRP of £45,990 or more, depending on the version. The petrol equivalent is a BMW 3 series, which has an RRP of £29,990 or more, again depending on the version. The running costs of electric cars are lower – charging a battery is cheaper than filling a tank with petrol – but for the average U.K. motorist, who has an annual mileage of 7,400 miles, these lower running costs will never compensate for the very high purchase price.
The lower running cost of electric cars is in any case largely an artefact of Government fiscal policy, namely the enormous amount of tax on petrol. Most of the cost of a litre of petrol is tax, whereas there is only 5% VAT on electricity. These very high rates of tax on petrol mean that if motorists switch from petrol to electric then the Government will face a black hole in its finances. The Government therefore will need to find a way of taxing electric vehicles to make up for this lost revenue. A plan under discussion is to install tracking devices in cars such that the Government knows how many miles you are driving and can then charge you a “per mile road tax”. If this happens, the running costs of electric cars will rapidly increase.