Millions of electric vehicle owners across Britain are facing new driving costs after Chancellor Rachel Reeves confirmed a radical shake-up of road taxation.
What the new pay-per-mile system means
The Treasury has announced that starting in April 2028, EV owners will pay 3p per mile under a new national charging scheme. For plug-in hybrid vehicle owners, the rate will be set at 1.5p per mile.
This represents the latest financial blow for electric motorists, coming after a significant Vehicle Excise Duty increase earlier this year. The new system will require drivers to declare their annual mileage to authorities.
Calculating the financial impact
With the average British driver covering approximately 8,500 miles annually, typical EV owners face an additional £255 per year in running costs under the 3p rate. Hybrid drivers would pay around £127.50 annually at the 1.5p rate.
The government states these measures address declining fuel duty revenues and aim to establish what they call a "fairer" tax system where all road users contribute to maintaining Britain's transport infrastructure.
Industry reaction and cost-saving advice
Motoring expert Jonathan Such of First Response Finance warned that the new charges could affect the transition to electric vehicles. "This will impact the number of Brits moving to electric vehicles as any perceived increased cost could be viewed as a barrier," he stated.
Such recommended that concerned drivers should review their home energy tariffs, as some providers offer special EV charging rates that could help offset the new costs. He also suggested checking government websites for potential grants towards home charging point installations.
The Treasury expects the new system to generate approximately £1.4 billion in revenue. While implementation remains nearly three years away, the announcement signals a significant shift in how electric vehicle usage will be taxed in the future.
