Owners of electric cars across Britain are facing significant new financial burdens after the government announced major tax changes specifically targeting low and zero-emission vehicles.
The Double Tax Hit for EV Owners
Chancellor Rachel Reeves has confirmed a new pay-per-mile taxation system that will see electric vehicle drivers paying for road usage directly. This comes on top of the earlier removal of the free vehicle tax perk that EV owners previously enjoyed.
Combined, these changes create a substantial increase in annual running costs for drivers who had chosen to go electric. The average EV owner covering 8,500 miles per year will face an additional £255 from the new mileage charge alone.
Meanwhile, the reintroduction of Vehicle Excise Duty adds another £195 to their annual bills, creating a total extra cost of approximately £450 for typical drivers.
Implementation Timeline and Hybrid Rates
The new pay-per-mile system won't take effect immediately, with its introduction scheduled for April 2028. This gives drivers time to adjust to the forthcoming changes in motoring taxation.
Owners of plug-in hybrid vehicles will face a lower rate of 1.5p per mile compared to the standard electric vehicle rate, recognising their continued use of some conventional fuel.
Those who regularly travel longer distances will find themselves paying considerably more than the average figures, as the new tax directly correlates with mileage driven.
Industry Concerns and Cost Comparisons
These additional charges have raised concerns within the motoring industry that the transition to electric vehicles could slow down significantly.
However, experts suggest that despite the new levies, electric motoring should still generally remain cheaper than operating petrol or diesel vehicles.
Mike Fazal, CEO of Leasing.com, commented: "A mileage-based tax is the Government's way of asking electric vehicle drivers to contribute in a similar way to petrol and diesel drivers, who already pay through fuel duty."
He added: "A 3p-per-mile charge doesn't undo the cost advantage of going electric. Once you factor in the new levy, most EV drivers are still paying around 11p per mile in total, compared with roughly 17p per mile for a typical petrol car."
The changes represent a significant shift in how electric vehicle owners contribute to road maintenance and transport infrastructure funding, moving them closer to the taxation model applied to traditional combustion engine vehicles.
