UK To Tax Electric Cars by the Mile Starting 2028 (bbc.com) 195
The UK government will levy a pay-per-mile tax on electric and plug-in hybrid vehicles starting April 2028, UK's finance minister Rachel Reeves announced, a measure designed to offset some of the fuel duty revenue that will disappear as drivers shift away from petrol and diesel cars. Electric vehicles will be charged 3 pence per mile and plug-in hybrids 1.5 pence per mile, payable annually alongside car tax. An average driver covering 8,000 miles a year would pay around $320, roughly half what a petrol or diesel driver pays in fuel duty.
The Office for Budget Responsibility expects the tax to generate $1.45 billion in its first year and $2.51 billion by 2030-31, offsetting about a quarter of the revenue losses projected from the EV transition by 2050. The Society of Motor Manufacturers and Traders warned the new charge would "suppress demand" and make sales targets harder to achieve. New Zealand and Iceland have already introduced road pricing for EVs; demand dropped in the former but held steady in the latter.
The Office for Budget Responsibility expects the tax to generate $1.45 billion in its first year and $2.51 billion by 2030-31, offsetting about a quarter of the revenue losses projected from the EV transition by 2050. The Society of Motor Manufacturers and Traders warned the new charge would "suppress demand" and make sales targets harder to achieve. New Zealand and Iceland have already introduced road pricing for EVs; demand dropped in the former but held steady in the latter.
Annoying but actually reasonable (Score:5, Interesting)
Most roadwork gets paid for from fuel taxes. EVs dont use fuel. Classic free rider problem.
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I would hope most every folk understand why such a tax is necessary and good but I guess I've never seen the logistical and privacy costs of tracking the miles driven worth the benefits over just flat rating the EV at registration, or making it based on vehicle weight or some other fact of the vehicle and driver. The best taxes tend to be the ones that are the simplest to comply with.
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What they’re proposing is fairly straightforward for the UK, where cars have to pay an annual tax to be on the road and have an annual test (“MOT”) to ensure roadworthiness annually. The plan is that drivers estimate the mileage for the year ahead and pay that as part of their annual tax, and then there’s a reconciliation when the car goes for its MOT.
There’s a few complications to work through, but it’s relatively easy to implement.
Re: Annoying but actually reasonable (Score:2)
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I guess that most drivers at least start out with the VED and MOT dates being roughly around the same — MOT first, then VED reasonably soon afterwards, so I suppose that works. Get your actual at MOT and then do the reconciliation and next year forecast at VED renewal. I guess this is some of the detail we’ll get in the future.
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It doesn't even have to be linked to the car tax.
NZ uses "Road User Charges" for diesel - it does not have the tax built in at the pump (petrol does), so all diesel cars have to buy blocks of kilometres as tax. The government get updated when your annual vehicle inspection is done, but between those inspections its up to you to make sure you have enough spare kilometres left for your trips. If you get stopped by police and they check, being too far out is considered to be tax evasion and a criminal offence
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The easy way is to check the odometer reading every time you renew. If you decide to lie, well, it's easy to verify because eventually you'll either have to scrap the vehicle or you'll sell it to someone else and they'll have to report the new odometer reading. And it all catches up from there (because the new owner will likely not want to pay for the difference in taxes). And scrapping the car likely needs paperwork so they can cancel the title and deal with tax issues. Of course, if you find a scrapper wh
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In the UK, MOT inspectors already make an official recording of the vehicle mileage when they do their annual inspection
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"Sir, you seem to be driving a lot, is there a legitimate reason for it?"
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>"Annoying but actually reasonable"
It is absolutely reasonable in concept. But it might not be in practice. I have zero problem with paying for my actual EV mileage in some tax. My State decided it was going to collect it annually during registration renewal. Also reasonable. But they either charge an "average" mileage of ALL EV drivers (however they determine that), or force me to put an always-on tracking device in my car. And neither is reasonable. And my vehicle manual actually says that such
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>"It can very well be true, though, that one government entity is not allowed to share personal data with another government entity."
It could be. But it also seems ridiculous and incompetent in this case. Both entities already know me, my address. And both know my vehicle, VIN, etc. One just knows an annual odometer reading that the other does not. Not like this is sensitive data or could be abused at that resolution.
I shouldn't assume the worst, but it APPEARS like they want to force people to try
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Probably because those "benefits" don't tend to go towards the people paying the taxes. Workers pay taxes, non-workers suck down all the benefits. Some how, everyone gets the same vote, despite nearly half the population not contributing to the tax base.
Re:Annoying but actually reasonable (Score:5, Interesting)
1. Taxes on ICE vehicles don’t begin to capture the cost externalities associated with their use. Health costs from tailpipe pollutants alone are really significant. It was never a hypothecated tax because (a) the UK doesn’t really do any hypothecated taxes, and (b) the costs aren’t just roads
2. The weight difference between an EV and an ICE vehicle is completely irrelevant for the purpose of road wear. Road wear is essentially entirely caused by large vehicles — buses, lorries, etc — because as you yourself pointed out, it grows as the fourth power. So a 1.5 ton EV supermini causes about 1.8x the damage of the ICE vehicle. But a bus weighing 12 tons causes something like 1,500 times the damage, and a 40 ton artic (= semi) causes something like 30,000x the damage. Even the difference between a heavy UK SUV at 2.5 tons and the 1.3 ton ICE supermini is just unimportant by comparison.
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Your calculations are a bit off: it's the fourth power of axle weight not vehicle weight. Artics have many more axles so you've overestimated the relative damage. It's still a lot, hundreds of times more, but there are hundreds of times more cars. So car damage matters.
Hmmm... (Score:3)
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Weight would be "fair". Taxes are never fair. They tend to let people that make poor/selfish decisions off the hook much more then your responsible person that's driving more efficient vehicles.
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Funny, because that's true in California as well. If you drive a hybrid in California, it's cheaper to buy gas then charge with electricity. This stays true up until around ~$7 a gallon. Of course, by the time gasoline goes to $7, the KwH cost will likely be a $1. It's already over $.50 now.
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The more expensive public charging is about on a par with a decently efficient fossil car. When it can get expensive (aside from rip-offs) is when you also have to pay for parking, which is common in London.
If you can charge at home then it is much cheaper, around 2p/mile, or free if you have solar.
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Emissions and road use should be taxed separately.
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I suspect that fossil fuel and non-plug-in hybrid drivers would LOVE to replace their fuel bills with a 3 cent per mile charge.
No doubt, but the grownups aren't talking about replacing the fuel bill with a per mil charge, we're talking about replacing the fuel tax>/em>. California has the highest gas tax in the US, at 61.2 cents per gallon. I drive about 10,000 miles a year. The gas tax comes out to a bit less than $250/year at 25 mpg. 3 cents per mile would be $300/year, or higher (though not a lot higher).
In the rest of the country - by definition, our gas tax being the highest - the difference will be more.
Note that the ga
Make All Cars Pay (Score:4, Interesting)
As a friend once said, "You don't penalize people for doing the right thing." But it's a legitimate concern that the system of funding roads from fuel taxes is going to collapse due to EVs. So the solution is to apply the new fees to all vehicles. This will encourage the transition instead of slow it. Also, they can start with the fee being much lower, so the estimated revenue matches the estimated loss due to reduced fuel sales, and they can phase it in over time as fuel sales continue to drop.
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Government always punishes people for being more efficient. Government cares about it's precious revenue streams. Doing the "right thing" doesn't matter at all. Regardless of what they say.
according to google.... (Score:5, Insightful)
The UK collected £24.83 billion in fuel taxes in 2023 and budgeted £4.8 billion on road maintenance including resurfacing.
It seems to me that the EV tax should be 1/5 of the current fuel tax, and that the actual fuel tax should also be 1/5 of its current rate.
Re:according to google.... (Score:4, Insightful)
Re: according to google.... (Score:2)
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Oh, but they can, but if the UK lowered their fuel tax rate by 75% to only cover the cost of road maintenance, it would mean that a new, NHS specific tax would have to be collected to cover (in 2023) £239B, and I'm pretty sure you'd never say "We have free public healthcare." ever again, because you don't.
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The UK does not have a hypothecated road tax, no matter how much people think it does or think it ought to. And the costs to the public purse of vehicles are much more extensive than just roads maintenance. There’s NHS costs (respiratory damage, cardiovascular damage, accidents, etc etc), policing, productivity hits from congestion, etc.
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You could tax the car companies themselves to pay for it but good luck with that. Realistically if you have the political power to do something like that you probably wouldn't have a car centric society that shifts billions of dolla
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But not by 300%. If things were that bad, they'd have banned private cars in the early 1940s when they had the chance
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How do tires generate NO and suflur dioxides? Also, CO isn't truly pollution until the levels triple.
Liee, lies and more lies (Score:2, Interesting)
The gasoline tax was introduced to encourage the adoption of pollution free alternatives by building out the infrastructure that was required to charge these vehicles.
It has now transformed into a road building initiative and a possible tax loss. Before the gasoline tax, roads were built with the funds accumulated from income tax. Is this going to be refunded or are we going to continue funding projects that continue to have budget overruns?
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Gasoline says or a USAian ... the UK doesn't fund roads with Road Tax ... so you are also a USAian
Re: Liee, lies and more lies (Score:4, Informative)
The gasoline tax was introduced to encourage the adoption of pollution free alternatives by building out the infrastructure that was required to charge these vehicles.
Absolute bollocks. There was duty on fuel back when the only EVs on the roads were milk floats.
Or maybe not ... (Score:2)
It is a plan ... that requires consultation, new laws and a method of enforcing it that people can't simply bypass ....
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All true, but it’s fairly do-able.
With this Tax ... (Score:2)
EV's are still horrifically cheaper to run than an ICE vehicle by very large margins
NB Vans and commercial vehicles are exempt ...
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>"EV's are still horrifically cheaper to run than an ICE vehicle by very large margins"
That depends on the gas price, electricity price, and efficiency of the vehicle. ICE will usually lose by a lot. But there are plenty of places where that gap is not "horrific", if the ICE vehicle is very efficient, gas prices are low, and electricity is not.
I can see the result already (Score:2)
Instead of encouraging clean long-distance driving from the UK, to, let's say Marbella and back +- 5000km, it nudges people to take a plane (with higher emissions) and rent a car abroad where the UK can’t tax the miles.
Environmental economics professors would roll their eyes so hard they’d see their own brainstem.
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The numbers of people who drive that kind of distance from the UK are absolutely miniscule. I doubt it’s even 1 in 1000 Brits who arrive in Marbella in their car rather than a plane. Somewhat different for France, but still, the alternative there is the train, not the plane, for many.
How to say you don't care about climate change ... (Score:2)
Get it from general revenue (Score:4, Funny)
Having a million separate taxes is a legacy from a distributed type of governance which has long stopped existing. All layers of government should get the vast majority from property, capital gains and estate taxes.
Some disencentivization taxes can be appropriate, but road transport in general is not something to disencentivize in my opinion, only a small part is luxury spending.
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Ideally that's what would happen, but politicians are usually landlords and insider traders.
ALL taxation is distorting (Score:3)
Given that the economy works best without distortion, it is wise to have a lot of taxes with relatively low rates rather than a few with very high rates.
People don't get the UK or the UK Labour Party (Score:2)
The point of the per mile tax is to replace the tax which is levied on gasoline, when gasoline is no longer used by EVs.
The gas tax does not fund road building and maintenance, its yield is many times greater than the spend on roads, and its anyway not hypothecated.
What you have to pay attention to in this tax is how policy in the UK Labour Party evolves, bu the end goal remains the same. The basic idea is to tax transport. The old way fails, so a new way of taxing transport is introduced. Whether its su
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You're ascribing an awful lot of thought and direction to a party which has shown very few signs of either of those.
Seriously your claiming Starmer believes all that shit? Prove it for the love of god please because no one else had figured out what that guy actually believes in.
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The UK private school sector has stayed stable at between 6 and 7% of pupils for literal decades, through endless policy changes. In London, it has become very expensive, but then London attracts a lot of extraordinary wealth, and schools charge what the market will bear. I say this with some knowledge as I had one kid at one expensive North London private school, and other has just switched from a GDST that was a bit cheaper to a different one for sixth form that is eye-watering.
Fees aren’t driven by
What about a toll? (Score:2)
Hey here is a simple idea... Why not do a toll? You know something simple that they do with trucks. For what I hate about this tax is what happens when you are outside of the country?
Re:I thought we were saving the planet? (Score:5, Informative)
Not surprising at all. This was a concern that was raised over a decade ago, even in discussions here on /.
The fact is that road maintenance needs to be paid, and it was long thought that charging taxes on gasoline was a good way to fund roads because it was simple to implement, it scales with how far you drive, and it also scales with the size of your vehicle (larger vehicles do more damage to the roads). So it was relatively fair. It also didn't require invasive data collection, such as how far or where you drove your vehicle.
When it was first discussed here on /., the consensus opinion was that if you drove an EV, you should have a GPS tracker installed in your car that measured how far you drove. We used to have big discussions here about privacy, and the privacy advocates thought that a government mandated GPS tracking you everywhere you went would be an overreach by government. I was generally in favour of paying the fee when you renewed your license plate for the year, where you have to submit your vehicle mileage anyway.
Of course now we voluntarily GPS track ourselves and send the data to our corporate overlords, so that all seems like a moot point.
Will this new law also apply to those crazy guys that power their diesel cars off used french fry grease they get from restaurants?
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Road maintenance. Yeah...They divert some of our gas tax to build other shit, like light rail. So the gas tax doesn't even go for what it's suppose to. Not entirely anyway.
Re: I thought we were saving the planet? (Score:2)
It would be nice if they used those taxes to actually pay for road maintenance in California. It's actually incredible, right when you cross the California border into Arizona, the price of gas goes from $5.55/gallon to $2.89/gallon, and the roads suddenly become drivable. That was my exact experience yesterday. Literally, the potholes on the Arizona side were all filled in (you can see the patches) where in California they're just left open. And this is out in the middle of fucking nowhere, desert plains f
Re:I thought we were saving the planet? (Score:5, Funny)
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Re: I thought we were saving the planet? (Score:4, Informative)
In the UK, you donâ(TM)t have to renew your licence plate every year, the DVLA doesnâ(TM)t know your mileage until the first MOT test⦠three years after the car was first registered. I think the government is working on the honesty of the registered vehicle owners.
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The problem with this is that some states want to tax not just the cars that are registered in the state, but all vehicles that drive through the state.
That being said, whatever rule goes into effect for EVs should be for all vehicles.
You want to do it by weight * miles driven? Great! Do it for all vehicles based on weight * miles driven. Make it payable every time you renew your car's registration.
Easily done.
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I actually wrote California about the purposed per mile charge and specifically asked why vehicle weight doesn't get mentioned in their idea. As you can guess, crickets.
As I'm sure you are aware, weight of the vehicle directly impacts damage to the roads, which is what gas tax is suppose to cover.
Here is a link talking about the purposed changes. https://caroadcharge.com/about... [caroadcharge.com]
My favorite part is concern about rural and poor folks driving shitting cars. Some how, they are responsible for damage to the bio
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> why vehicle weight doesn't get mentioned in their idea
It's because the difference between 3000 and 4000 lbs is practically negligible. Yeah it's a 4th power relationship, but 3000 to 4000 lbs is about 3x the wear rate and 3 multiplied by practically nothing is still practically nothing.
Not to say I'm against including weight as part of the tax calculation, because it would incentivize people using smaller vehicles which helps in a lot of other ways.
=Smidge=
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There's a big difference between New Zealand/Iceland and the UK: you can easily drive out of the UK, either to the republic of Ireland or to mainland Europe. You can't do that in either of those other examples.
I get the idea of charging for road use by mile within the UK but how is this going to take into account distance driven outside the UK?
Just counting miles on an odometer ignores miles driven on roads that aren't in the UK and therefore shouldn't be taxable - the same as if you put petrol in your car
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I think you’re dancing on the head of a pin, here. All taxes have some edge cases where they create some unfairness, whether income or consumption or property or anything else. The fact that a small number of drivers will have to pay for some miles driven outside the UK is really not that big a deal. It’s a tiny percentage of the total number of vehicles on the road in any one year.
The bigger distortion compared to fuel tax is that the most efficient EV pays at the same rate as the least efficie
Re: I thought we were saving the planet? (Score:3)
The fact that a small number of drivers will have to pay for some miles driven outside the UK is really not that big a deal.
You're forgetting about hauliers.
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Exempt for the time being. So they’ve got some leeway to try to think of a system that doesn’t penalise UK hauliers while boosting overseas hauliers. Good luck to them with that! I don’t think ti’s going to be straightforward. Maybe they will need to start checking truck mileage at ports, including for foreign vehicles.
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Who are already required to record mileage on UK roads for other reasons, so thats a solved problem.
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Out of interest, why can't we just replicate this logic with EV cars?
Since we're talking about tracking milage, we're presumably happy with hardware being installed in the cars to report information back to the government. Why can't that report back the number of KWH of electricity "pumped" into the cars, and tax that instead at some equivalent rate? That way more efficient cars get the same benefit as they would under a petrol tax, and so the same incentives still apply.
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Simple: At the exit point, passport control records your mileage. When you return, they record it again. Any travels outside the country don't get counted.
But as others have said, it's a really tiny edge case, probably not worth worrying about.
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That's an edge case not worth fixing.
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No, I think it’s significant for hauliers as a sector, especially because you have to consider the policy / competition effects of a charge on UK hauliers that affects them both at home and abroad but doesn’t affect non-UK hauliers on UK roads. I think there’ll be a way through but not that simple.
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How many truckers are driving electric vehicles, though?
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The thing is, the tax needs to be designed to work for the next decade at least, though. And over that time, an increasing proportion will be.
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Remember that in the UK, max speed for an HGV is 60 on a motorway, and 45min rest breaks are required every 4.5hours, ie max driving between rest breaks is 270 miles (not happening on UK roads, you’ll definitely encounter traffic / roadworks and have to slow down before then). So an EV truck that can recharge a couple of hundred miles in 45 minutes can essentially go for as long as the driver here. Something like this:
https://www.volvotrucks.com/en... [volvotrucks.com]
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"you can easily drive out of the UK, either to the republic of Ireland"
Well, Paul did say I can drive a Cadillac across the Irish Sea
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FYI, their statement about Iceland is wrong [samgongustofa.is]. BEV sales were:
2019: 1000
2020: 2723
2021: 3777
2022: 5850
2023: 9260
2024 (first year of the "kílómetragjald" and the loss of VAT-free purchases): 2913
2025: 5195
Does this look like the changes had no impact to anyone here? It's a simple equation: if you increase the cost advantage of EVs, you shift more people from ICEs to EVs, and if you decrease it, the opposite happens. If you add a new mileage tax, but don't add a new tax to ICE vehicles, then you're
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And in New Zealand you can easily drive miles and miles on private roads, which are not maintained by the government...
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I think it’s a mistake to think that this tax is designed to tax only miles on UK public roads. It’s not a hypothecated tax, after all.
Replacing fuel duty (Score:2)
Given that drivers on private roads already pay fuel duty for the miles they drive on private roads, it makes sense for the replacement tax to be equally taxing such miles.
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And unless you and rather a lot of your friends are volunteering to work on road crews out of love of the smell of hot asphalt, those need to be paid for.
Personally, I like targeted consumption taxes like this. You don't drive? Then you don't pay for roads you don't use. (You still pay the pass through on physical goods that need transported, but that's also as it should be.)
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Nah. Any time we find a way to be more efficient and avoid "use" taxes, the government passes a new tax to make up the revenue drop.
Let me use California as an example. SDGE (power computer in southern cali) just recently added in a "base service fee" to the bill. It's $0.79 a day. Since it's illegal to not be on the power grid in the vast majority of cities in California, it's effectively a connection fee. You could use ZERO KwHs and they are still charging you.
They did this to scrap back money from the so
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The UK is one of the halfway countries that still uses miles and gallons for vehicles but metric for almost everything else.
Just be aware that the UK gallon is different from the US gallon.
Re: Make EV owners buy fire insurance also (Score:2)
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you must have watched a lot of 1980's movies. Gas powered cars do not explode when getting into accidents. Lithium is far, far more dangerous when exposed to moisture.
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The fires can be worse but gas cars catch on fire like 2-20x as often.
This is also a problem that is only going to get better over time, most companies are moving away from lithium-ion and they are making more and more stable. In 20 years all the batteries will be solid state and those vehicles will effectively be inert, the only flammable device will be the airbags.
This was more interesting counterpoint back in the 2010's where every Tesla that caught fire made the national news but the stats just don't b
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Gasoline powered vehicles catch fire catch fire at far higher rate (80X) [energysavingtrust.org.uk] than an EV. You must watch too much on-line slop. Battery vehicles do not usually catch fire in accidents.
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Wait until you look up the properties of petrol.
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Interesting for Tesla owners (Score:3)
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Cars already have odometers which record and show mileage, they already have annual inspections where the value from the odometer is checked and recorded and there are already legal penalties for tampering with the odometer. It would be trivial to pull that data out of the existing database and levy taxes on the vehicle owner based on that.
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Don't know where you are from but here in America(TM) we let the states decide how and whether at all vehicles get inspected, despite the fact there are zero restrictions for driving between state borders.
I live in a no inspection state and while when I did it was annoying to have to take it in every year or two the number of tires in the parking lot I see with the belt wires poking out tells me they're probably a good thing.
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It’s almost as though you’re completely unaware that you’re commenting on a story about a change to taxation in one of the three countries in the world that is not the US.
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Yeah my bad, I thought they were commenting why everyone is surprised by the inspection, I figured everyone in the UK knows they have inspections but some folk don't even know of the concept around here. .
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No worries! Yes, we in the UK have annual inspections. And the driving test is quite hard, too.
Re: 2 out of 10 - Could do better. (Score:2)
How does the odometer know that all those miles were acquired solely on UK roads? What if I load my car onto the train and drive around France, or load it onto a ferry and drive it around the Republic of Ireland?
Re: 2 out of 10 - Could do better. (Score:3)
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Tough titties on you, tbh. Taxes are never perfect. There’s always cliff-edges, winners and losers, ways of gaming the system, etc.
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They could make a note of mileage leaving and re-entering the UK.
Penalty for misplacing the documents would be paying for all the miles.
Or keep it in a database for tax purposes.