Spring Statement – did it change anything for motorists and automotive businesses?

As the dust settles on the Spring Statement, did the Chancellor of the Exchequer give any glimpses of good news for motorists and automotive businesses? 

It was clearly labelled as NOT a mini budget, so huge changes may not have been expected for motorists, but with some of the announcements from the Autumn Budget due to come into force, let’s explore what Rachel Reeves’ latest update might mean for UK motorists. 

Are EV owners left feeling flat after the Spring Statement? 

There was no new news for EV owners in the Spring Statement. 

It confirms that EVs are no longer exempt from Vehicle Excise Duty (VED), removing one of the key financial incentives for many drivers who made the switch. 

Starting from April 2025 new EVs are subject to a £10 rate in year one, which is then increased from the second year onwards to a standard rate of £195. 

But that’s not all, from April EVs will also be hit with the Expensive Car Supplement.  

Introduced in 2017, this is an additional fee for higher priced vehicles that was previously not applicable for EVs. 

 From April, new electric cars with a list price of more than £40,000 will pay an extra £425 a year between years two to six, while electric cars registered between April 2017 and 2025 will face a £195 a year rate. Even older EVs will have to pay £20 a year. 

Obviously, this isn’t great news for private car owners or for fleets wanting to be sustainable behind the wheel. 

Additionally, all this comes at a time when EV sales are starting to slow and are falling short of targets, as car manufacturers grapple with the 2030 ban on sales of new petrol and diesel cars. 

Dodging potholes 

It was recently announced that English councils must publish annual progress reports on fixing potholes to receive the £500m boost to road maintenance announced in the Autumn budget. 

If they don’t then they’ll miss out on a quarter of the extra funding. 

While it’s encouraging that the menace of potholes is being addressed, it’s less so that no additional funds were announced in the Statement in the House of Commons. 

Potholes are a constant plague for motorists, motorcyclists and cyclists, as well as businesses and their fleet and delivery drivers. 

Not only can they cause significant damage to a vehicle, resulting in potentially expensive repairs for individuals and businesses, but they also pose a major safety risk. 

Growth forecast halved 

Overall, the headline was the unwelcome news that the growth forecast for the UK economy for 2025 has been cut from 2% to 1%. 

Will continued economic uncertainty mean households put a tighter grip on purse strings and put off big money purchases, such as a new car, especially an electric model that now faces VED road tax? 

However, the government did also say the UK is on target to move from a deficit to a surplus by 2029/30. 

It looks like we’re all in for more short-term pain for a long-term gain so it will be interesting to see how new car sales perform throughout 2025 and beyond, especially now given the news that the White House has announced a 25 per cent tariff on all imported cars. 

Uncertain times needs a strong voice for automotive businesses 

The Spring Statement did little to calm nerves within the automotive sector as UK economic growth this year has been downgraded while EVs are hit with new duties within days. 

These added pressures mean automotive companies will be facing the pressure more than ever, meaning now might be a time for businesses to assess their business strategy. 

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