Despite electricity VAT cut motorists remain reluctant to make the EV switch

Prime Minister Andy Burnham's government has confirmed it will remove VAT from domestic electricity bills in Great Britain, cutting the rate from 5% to 0% from 1 October 2026 and taking around £45 off the annual Ofgem price cap. Yet despite the move, new research from Venson Automotive Solutions shows motorists remain reluctant to make the switch to electric, with just one in five drivers it surveyed saying they would choose an EV if replacing their vehicle tomorrow.

The reluctance is compounded by the UK’s "driveway divide." While the VAT cut will reduce the cost of charging at home, public and on-street charging remains subject to 20% VAT, which means those motorists without access to home charging will gain no benefit. In 2025, 61% of motorists surveyed by Venson backed removing the 20% VAT rate from public charging, a call that Burnham has ignored.

The good news is that more than one in three (36%) motorists plan to switch to an EV within two years and almost two-thirds (65%) expect to do so within five years, suggesting the long-term outlook for electrification remains strong, even if short-term appetite lags.

Encouragingly, the research also suggests that developments in EV technology and infrastructure are strengthening motorists' appetite to switch. Improvements to charging infrastructure would influence 44% to choose an EV, while 37% are encouraged by advances in battery technology and 36% by the opportunity to reduce emissions.

Cost remains central to motorists' decisions. Rising petrol and diesel prices would influence 47% to choose electric for their next vehicle and more than half (56%) say lower electricity costs would be the single biggest factor in accelerating their switch, but only if that saving reaches them.

Simon Staton, Client Management Director at Venson Automotive Solutions, comments: "The driveway divide has important implications for fleet operators. Employees who can charge at home may see their costs fall, while those reliant on public charging will continue to face substantially higher prices. "

Venson advises fleet operators to identify where and how employees are likely to charge as part of the move to an EV fleet. This should include assessing access to off-street parking, typical daily mileage, local public-charging availability and whether workplace charging can provide a practical and affordable alternative.

Businesses should also review their reimbursement policies periodically, ensuring rates reflect real-world charging costs rather than assuming every employee can use a low-cost home tariff. Clear guidance on approved public networks, off-peak charging and fuel cards can help drivers control costs and reduce administrative complexity.

Simon Staton continues: "EV suitability cannot be determined by mileage and vehicle choice alone. Understanding how each employee will be charging their vehicle, providing workplace facilities where practical and operating a fair reimbursement policy will ensure an inclusive approach to EV transition.

"If the Government can deliver measures that bring public charging costs more closely into line with home charging, it has an opportunity to remove one of the key remaining barriers to increased EV adoption.”