The DVLA has issued a warning over an expensive tax mistake that could cost electric vehicle (EV) buyers hundreds of pounds extra each year. Motorists are being urged to check the official list price of any new EV carefully to avoid falling into a costly tax trap.
New VED Rules for Electric Cars
From April 2025, electric cars are no longer fully exempt from Vehicle Excise Duty (VED). The new rules bring EVs broadly into line with petrol and diesel models. The DVLA stated in a social media post: "Electric cars priced £50,000 or under are no longer subject to the expensive car supplement if they were first registered from April 1 2025."
Tax Breakdown
The first year rate for EVs is £10, followed by a standard rate of £200 from year two onwards. However, for cars with a list price above £50,000, the standard rate is £200 plus an expensive car supplement of £440, making a total of £640 per year for five years (from year two to year six).
A driver choosing an EV just under the £50,000 threshold will typically pay around £200 per year. But going just over the line increases the bill to £640 per year for five years, amounting to an extra £2,200 over the period purely because of the list price.
Key Warning
Crucially, it is the official list price before discounts that determines the tax band, not the actual price paid by the buyer. The warning comes as electric car prices drop rapidly, making it easier for buyers to stay below the threshold. Data from the Society of Motor Manufacturers and Traders shows EV sales continuing to rise strongly against the background of greater availability of lower-cost models. Meanwhile, the used market has seen particularly sharp price falls, with second-hand EVs depreciating faster than many petrol equivalents due to growing supply.
