Chancellor Rachel Reeves' new plan for a pay-per-mile car tax for electric vehicle drivers could see them turn their back on eco-friendly cars, according to a new study.
Pay-Per-Mile Tax Concerns
According to research by Zenith, 74 per cent of 3,000 road users polled are concerned about the potential cost of a pay-per-mile road tax. Forty per cent suggested they would consider switching back to an internal combustion engine car if running an EV became more expensive.
Andy Wolff, managing director of Zenith’s corporate division, stressed there was a “clear disconnect” emerging between officials in the Government and ordinary motorists. He explained that “inconsistent” policies were undermining trust in the transition to electric vehicles, leaving motorists uncertain.
Andy said: “Drivers are being offered tax incentives and grants to encourage EV adoption while simultaneously facing uncertainty around future taxation, including proposals such as pay-per-mile charges. These conflicting messages mean only 15 per cent of EV drivers feel optimistic and confident about the transition to electric vehicles.”
Details of the Proposed Tax
UK-registered cars would be liable for eVED, including mileage driven overseas. Only cars would be in scope; motorcycles and vans would not be included at the outset because the transition to electric is less advanced for those vehicle types. Cars exempt from VED would not be exempt from eVED because the tax is designed to be a broad equivalent to fuel duty.
Government Response
In response to the findings, HM Treasury defended its policies. The tax authority and finance department said: “That’s why the government will introduce electric Vehicle Excise Duty (eVED) from April 2028. It will be set at half of the equivalent rate of fuel duty for electric cars, and half again for plug-in hybrid cars. eVED will ensure all car drivers contribute, but will still maintain important incentives to switch to an electric vehicle.”
