12 May 2022
• A key downside of going down the route of a simplified road pricing scheme is that it would limit the ability to use motoring taxation to curb congestion in parts of the country where it is particularly problematic. [...] Source: SMF analysis The “messy” interim period in which ICE vehicles and EVs are on the road Another challenge related to road pricing is how to proceed during the “interim period” in which there is a mix of ICE vehicles and EVs on the road, potentially subject to different motoring tax regimes. [...] This reflects the findings of a range of studies that have looked at the sensitivity of car demand to changes in fuel costs and show that miles driven are relatively unresponsive to changes in fuel prices.23 More details on the assumptions made can be found in the appendix to this report. [...] The longer the problem is unaddressed, the bigger the hole that will emerge in the public finances and the less time that remains for a full and frank public debate about how to reform the policy framework. [...] To assuage potential concerns about telematic devices in vehicles and enable swifter rollout, the road pricing infrastructure should include the ability to pay one’s road pricing bill using a mileage reading registered at the time of vehicle MOT, point of sale/scrappage of car and point of exiting the UK in the case of foreign-registered vehicles.