Chancellor Rachel Reeves is facing mounting pressure to scrap a proposed £300 annual charge for electric vehicle (EV) drivers who cover 10,000 miles a year. The Labour government's pay-per-mile car tax plan, confirmed in last year's Autumn Statement, would impose a rate of 3p per mile on EVs from 2028.
Campaigners Warn Against New Tax
Electric car campaign group EVA England has called for the new electric Vehicle Excise Duty (eVED) fee to be axed, cautioning that it could deter motorists from switching to electric vehicles. In an open letter to the government, the group stated: "Our report also raises our continued serious concerns about the proposed introduction of electric Vehicle Excise Duty and any future pay-per-mile model at such a sensitive moment in the transition."
The letter added: "With only 5.5% of the total car parc electric, British consumers currently being extremely price-sensitive, and 40% still EV sceptical, now is not the right time to introduce an additional tax that many drivers see as an EV-only tax. It risks undermining confidence just when we need to focus on making sure more drivers are beginning to see EVs as a viable, practical option."
Industry Opposition
The Society of Motor Manufacturers and Traders (SMMT) also voiced strong opposition. A spokesperson said: "We recognise the need for a new approach to motoring taxes but at such a pivotal moment in the UK's EV transition, this would be entirely the wrong measure at the wrong time. Introducing such a complex, costly regime that targets the very vehicles manufacturers are challenged to sell would be a strategic mistake."
Government Defence
In response to the criticism, the Department for Transport defended the policy: "This Government is committed to the EV transition – boosting support to save drivers up to £3,750 on a new car and investing over £3 billion into UK manufacturing and more charging points. Right now, EV drivers pay no fuel duty, while petrol drivers pay around £480 a year - that's not fair. Under the new system, EVs will pay half the duty of petrol cars – still the cheaper, greener choice."
Impact on Drivers
The pay-per-mile tax would mean a driver covering 10,000 miles annually would face a £300 charge. With only 5.5% of cars on UK roads currently electric, campaigners argue the tax could slow adoption at a critical time. The government maintains the policy ensures fairness as the EV market grows.
