New petrol and diesel rules coming to UK risk 'murdering' car sector

James Rodger

4 February 2025 at 8:10 am·2-min read

-Credit:Reach Publishing Services Limited

Rachel Reeves risks "murdering" the car sector with punishing tax hikes in April as drivers could pay double. Kevin Griffin, the UK boss of Korean car brand KGM, formerly SsangYong, has called on the new Labour Party government Chancellor Ms Reeves to help stop drivers from avoiding buying vehicles due to the tax implications.

Griffin told The Sunday Times: "Stop murdering the motor trade. Because that’s what you’re doing with your increase in first year road fund license. And the push towards electrification where the country is not ready to take it on board. Stop it and start supporting [the industry]. And if you support them, you’ll actually find that they’ll support you."

Griffin warned that "for a company of our size" they could face fines of up to £12million if their electric vehicle count was above the penalty threshold of more than 2,500 vehicles. Griffin added: "The credits are hugely expensive. Because we’d buying a credit [for each car sold beyond the quota] for £12,000. All you’re doing is throwing money away. [In the UK] we’re an importer of vehicles, we’re not a manufacturer of vehicles.

"So our margins within the cars are not 30 per cent, 40 per cent, 50 per cent. They’re not. So we can’t afford to buy credits at £12,000; we’re not going to make that up." Ms Reeves announced in the Autumn Statement that first year Vehicle Excise Duty (VED) rates for all cars emitting more than 76g of CO2 per kilometre will see prices double from April 1, 2025.

Motorists who buy the most polluting petrol or diesel vehicles, namely those which emit more than 255g/km, will see prices spiral from £2,745 to a whopping £5,490. A Department for Transport spokesperson told GB News: "We want to support the sector through the transition to electric, as we continue to deliver our growth mission.

"We are therefore currently consulting on requirements between 2030 and 2035, including details for smaller manufacturers, and will confirm details in due course."

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