Thinktank urges weight-based 'Large Vehicle Levy' to curb SUVs and raise £1.7bn

Transport & Environment (T&E) has urged Chancellor Rachel Reeves to introduce a weight‑based “Large Vehicle Levy” in the 26 November Autumn Budget, saying the current Vehicle Excise Duty (VED) system is providing a “haven” for SUVs and costing the Treasury nearly £2 billion a year in lost revenue.

The green thinktank argues that the UK’s VED, which is based on a vehicle’s official CO2 output, fails to reflect the real‑world impacts of heavier vehicles on roads, public safety and emissions. T&E compared UK charges with several European systems, notably France’s malus tax, where acquisition taxes include weight and can push bills for large, polluting SUVs into the tens of thousands of euros.

T&E used an £85,000 BMW X5 to illustrate the disparity. Under current UK rules a new X5 faces about £3,200 in first‑year VED based on its CO2 rating, the group said, while a buyer of the same model in France could face a charge of roughly £66,600 under the French weight‑sensitive malus. Across 13 European countries analysed by the thinktank, acquisition taxes for large SUVs are typically applied at the point of sale and are, on average, more than three times higher than the UK’s showroom tax; seven EU nations impose no acquisition tax at all.

Under T&E’s proposal, vehicles heavier than 1,600 kilograms would attract an extra charge of £10 per kilogram above that threshold. The levy would exempt most family cars, the thinktank said, and would include a higher allowance for fully electric vehicles to account for battery weight — recommending a 400 kg uplift that would set the threshold for EVs at 2,000 kg. T&E estimates the levy could raise about £1.72 billion a year, and says a “straightforward weight‑based” surcharge could contribute to narrowing a wider fiscal shortfall.

The organisation cited multiple harms it attributes to the SUV boom. SUVs now account for almost three in five new car registrations in Britain, T&E said, while a CarGurus analysis found that around half of new models offered by mainstream brands are SUV‑style. T&E highlighted research it said shows higher bonnets on many SUVs increase the fatality rate for pedestrians and cyclists by about 30 percent in collisions and cited analysis from Loughborough University concluding that drivers of some large vehicles have limited visibility of small children directly in front of the vehicle. The thinktank also estimated that a two‑tonne SUV causes roughly 16 times more road damage than a one‑tonne car, increasing maintenance costs carried by the wider public, and said about 1.2 million new cars sold each year are larger than a typical UK parking space, squeezing public areas and prompting some local authorities to ban oversized vehicles from certain car parks.

T&E’s vehicles policy manager, Tim Dexter, said the levy would make larger vehicles “contribute fairly for the damage they cause to roads, safety and the environment, while protecting most family cars from added costs.” He added that the measure could disincentivise manufacturers from expanding ranges of larger, higher‑margin models.

The Society of Motor Manufacturers and Traders (SMMT) criticised the proposal. Chief executive Mike Hawes said taxing on weight would “unfairly penalise families who need bigger motors” and risk becoming another barrier to electric vehicle uptake. He told the Daily Mail that manufacturers respond to consumer demand and that cars have grown in size partly to accommodate safety technology and, more recently, large battery packs needed to deliver range.

T&E acknowledged the interaction with electrification, proposing a higher weight threshold for battery electric vehicles to avoid disproportionately penalising them for heavier battery packs. The thinktank said the levy would target the heaviest and most polluting models while allowing most smaller cars to avoid extra charges.

The call comes as policymakers weigh fiscal priorities, road safety and climate commitments. Proponents of a weight‑based tax say it would align the price of vehicles more closely with the societal and environmental costs of heavier cars, while industry groups warn of impacts on consumers and potential effects on EV adoption. The Chancellor will set out fiscal measures in the Autumn Budget on 26 November, when ministers will decide whether to adopt weight‑based measures that T&E and other campaigners say are needed to address a growing SUV market and its wider consequences.