Vauxhall has cut prices on its range-topping EVs to avert the Expensive Car Supplement (ECU) on vehicle excise duty (VED).

All Vauxhall electric cars are now priced below £40,000 to swerve the Expensive Car Supplement

All Vauxhall electric cars are now priced below £40,000 to save customers the significant additional expense of the new supplement that comes into effect from today (1 April).

The changes bring the top-spec Grandland Ultimate down to £37,730, dropping it under the Expensive Car Supplement threshold and saving owners more than £2k in VED charges.

Previously, battery-electric vehicles were exempt from VED. However, from 1 April 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 ICE cars).

But electric cars priced over £40,000 (including options) will now also attract the new ‘Expensive Car Supplement’. This imposes an additional annual fee of £425 for five years, beginning from the second year of registration, on top of the standard rate.

The new levy means owners of applicable cars will pay some £620 per year in road tax, or a total of £3,110 over the first six years of ownership. For vehicles below £40,000 this is a total of £985 for the same period – a saving of £2,125.

Eurig Druce, managing director at Vauxhall, said the pricing changes align with Vauxhall’s ongoing move to make electric mobility accessible and affordable for British drivers.

But as with other firms, such as Alphabet, he warned that the threshold for the ECU ‘luxury car tax’ is too low.

“The threshold for the Expensive Car Supplement has remained at £40,000 since inception in 2017 despite subsequent high levels of inflation – if it were to have risen with inflation it would now be around £52,000. With the average price of an EV in the UK at around £48,000, this new tax means that customers buying some of the more attainable electric cars on the market are now being penalised whilst at the same time we are trying to move as many British motorists to electric as quickly as possible.

“The good news is that Vauxhall electric customers are below this new threshold, but we’d urge the Government to reconsider this new measure and ensure taxation policies incentivise the majority of drivers to make the shift to electric vehicles.”

Alphabet GB called earlier this year for the ECU threshold to be raised to £60k as it warned the current level hamstrings EV take-up.

Analysis by the business has revealed that the number of EVs available for under £40,000 is severely limited.