Experts: Tax Cars on Weight, Mileage to Promote 'Green' Transport

A U.K. vehicle emissions analyst is promoting a simplified and fairer approach to charging vehicles for using road infrastructure to replace the nation’s traditional vehicle excise duty (VED) and one that could be used in other markets.

A book compiled with help from Emissions Analytics, Critical Mass: The One Thing You Need to Know About Green Cars, suggests that cars should instead be taxed on a combination of weight and annual mileage. This book written by emissions experts Nick Molden and Felix Leach says the current VED system is a flawed "mishmash of incentives and penalties."

It’s in focus at the moment because in the U.K. starting April 1, 2025, battery-electric vehicles will lose their current tax exemption and ultimately have to pay the full standard rate of £190 ($240) annually.

The new legislation will also hit buyers of BEVs costing more than £40,000 ($50,666) with additional tax and second-hand BEV buyers and hybrid buyers will also have to pay more.

Molden, Emissions Analytics CEO, and Leach, associate professor of engineering science at the University of Oxford, say there is a solution that is not only better for the environment but simpler to administer and much easier to understand.

Molden explained: “Taxing a car on a combination of its weight and mileage offers a simple, potentially universal approach to pricing-in the environmental impact of cars while at the same time overcoming the objections to the current mishmash of incentives and penalties.

“In our book, we offer an intuitive ‘proof’ of why mass and distance are fundamental to designing a system to incentivize the purchase of ever-greener cars and this is contrasted with other flawed bases for judging environmental impact, such as measures of vehicle efficiency, including energy and fuel efficiency, as well as elements incorporated in the current system such as fuel type and laboratory carbon dioxide emissions.”

The two experts outline ways in which the system can be adopted and show the types of cars likely to taxed lightly and those that will be more expensive to keep on the road. Broadly, smaller cars will be cheaper to tax.

Under the pair’s proposed system, taking the example of the U.K., if an average car is 330 lbs. (150 kg) lighter or does 1,000 fewer miles (1,610 km), the owner would pay £100 ($126) less per year.

“Specific tax rates are proposed and compared to existing taxes to illustrate winners and losers – winners being small city cars and losers including high-mileage heavy cars and SUVs,” explains Leach. “The concept proposed is a reliable revenue-raiser at a time of widespread fiscal pressure and declining vehicle taxation. It could also be adopted rapidly and transitioning to it is easy.”

Molden adds that deploying a single measure of a car’s environmental credentials to guide purchases and government policy is the way forward, and the measure that takes account of approximately three-quarters of the environmental impact of a car is the car’s weight, and that metric correlates well with environmental damage.

However, in a separate emailed response to WardsAuto questioning whether the simplified approach to VED would penalize the heavier BEVs and reduce their ability to gain better ecological credentials by covering high mileage in a short time frame as highlighted in his organization’s Environmental Justice study of 2023, Molden says: “You raise a good, and interesting question. In headline, the answer is that the Environmental Justice article was only looking at CO2 emissions, whereas Critical Mass looks at all pollutants from cars.

“It is still true, from a CO2 perspective, that the BEV will only be superior to an equivalent ICE if it is driven relatively long distances (exact numbers vary and will change over time). However, during those longer distances, the heavier BEV will be emitting more tire pollution, for example.

“It should also be noted that, so long as the ICE is fueled on fossil fuel, it will still pay that tax at the pump, at an amended level, to reflect the embedded 'fossil' CO2. This would very likely make the total tax take higher on the ICE, unless it was fueled on synthetic or advanced biofuels.”

However, the authors believe that the idea of taxing a car on the basis of its weight and miles traveled also translates easily for a car-buying public that has to negotiate confusing rates and inconsistencies, while car makers have increased the size and weight of their models with impunity.

It could also be applied to other countries and promote further discussion of the incentives that could be applied to the most environmentally friendly powertrain options for consumers, whether BEV or ICE using carbon-neutral fuels.