Vauxhall has slashed the prices of its top-range electric vehicles, including the Astra Sports Tourer and Grandland Electric, bringing them under the £40,000 mark. Why the price drop? Starting April 1, 2025, electric cars with a list price over £40,000 will be hit with the new “luxury car tax.” That means vehicles with those shiny add-ons like fancy wheels or premium paint could push the price past that magic £40,000 threshold, subjecting buyers to extra taxes.
This applies to models priced over £40,000, including those made more expensive by optional extras like upgraded alloys or added packages. These vehicles are subject to the Expensive Car Supplement—an additional £425 per year for five years, starting from the second year of registration, on top of the standard rate.
Electric cars that now cost over £40,000 and include certain options will incur an additional £620 per year in road tax, totalling £3,110 over the first six years. This is a significant extra cost for EV drivers, who were originally exempt from these charges.
To spare its customers from this hefty surprise, Vauxhall has acted early and made sure their electric models stay under the threshold of the expensive car supplement tax. It’s a clever move that makes their EVs not just more affordable, but also a bit more appealing when you’re looking for your next vehicle.
Starting April 1, 2025, electric vehicle owners will no longer be exempt from Vehicle Excise Duty (VED), which they have been up until now. From April 1, owners of new electric cars will need to pay the lowest first year rate of vehicle tax, which is set at £10 for zero-emissions-in use (0g/km) vehicles. From the second tax payment onwards, they will now pay the standard rate of £195 (the same as petrol, diesel and hybrid cars).
All cars now command a flat rate of £195 per year from year two, with those costing more than £40,000 when new subject to an additional £425 for five years. Following Vauxhall’s price changes, the company claims customers could save up to £2,125 on VED alone – or as much as £2,825 if you also factor in the reduced list prices.
The range-topping Grandland Electric Ultimate is now priced at £39,995 (OTR), down from £40,495. Similarly, the Astra Electric Sports Tourer Ultimate has also dropped to £39,995, down from £40,695. The £1,000 price reduction from Vauxhall could help set them apart, particularly when it comes to the expensive car supplement, positioning Vauxhall as a strong contender in the electric vehicle market.
Vauxhall has taken the lead with its recent price reductions, a move that could prompt other manufacturers to follow suit. With stringent emissions targets ahead, automakers are under pressure to meet the zero-emission vehicle (ZEV) mandate, which will require 28 percent of their sales to be electric by 2025 and rise to 80 percent by 2030. As these regulations tighten, price adjustments may become a necessary step for manufacturers looking to stay competitive.
This is why Vauxhall has ensured its EVs stay under the £40,000 mark: for vehicles priced below £40,000, the total tax comes to just £985 over the same period – a saving of £2,125.
Currently, the average price of a brand-new electric vehicle (EV) is between £48,000 and £50,873. In contrast, the average cost of a medium-sized petrol car is £21,964, nearly £28,000 less than purchasing a new EV. This gap highlights the challenges in adopting EVs, especially with the Expensive Car Supplement still in place.
The government’s push to increase EV adoption could be hindered by the current cost structure. The high prices of EVs, combined with the potential costs from the Expensive Car Supplement, could slow down the transition from traditional petrol vehicles to electric ones. Since the Expensive Car Supplement hasn't been updated since 2017, many believe it should be adjusted to better align with inflation and the rising cost of EVs.
Furthermore, while EV drivers have historically been exempt from Vehicle Excise Duty (VED) and the Expensive Car Supplement, this benefit may soon be under threat as costs continue to rise, further complicating the affordability of EV ownership.
Vauxhall's decision to keep their electric vehicles (EVs) under the £40,000 mark is a smart and strategic move in a rapidly evolving market. As the electric vehicle sector continues to grow, one of the main barriers for widespread adoption remains the price. With EVs generally costing more than traditional combustion-engine vehicles, many potential buyers are hesitant to make the switch, especially with additional costs like the Expensive Car Supplement and Vehicle Excise Duty (VED) looming on the horizon.
By keeping their EVs under £40,000, Vauxhall is positioning itself as a brand that understands the need for accessibility in the electric vehicle market. At a time when the average price of an electric car is creeping past £48,000, Vauxhall’s price point offers a more affordable entry into the world of electric driving without compromising on quality or performance. This strategy not only aligns with the increasing pressure to decarbonize but also demonstrates a clear commitment to supporting the transition to cleaner, more sustainable vehicles.
The decision to keep prices below £40,000 also speaks to Vauxhall’s foresight in addressing the practical concerns of potential EV owners. With the upcoming introduction of new taxes, like the Expensive Car Supplement, many electric vehicle buyers will face higher costs. Vauxhall’s ability to maintain a competitive price while offering a sustainable alternative is a strong differentiator in a market that’s still grappling with cost challenges.