Chancellor Rachel Reeves is under mounting pressure after the government pushed ahead with a controversial tax on hybrid vehicles, despite evidence that many drivers rarely use electric mode. The new pay-per-mile tax, known as Electric Vehicle Excise Duty (eVED), will come into effect from April 2028 and applies to both electric and plug-in hybrid vehicles.
How the Hybrid Car Tax Works
Under the eVED scheme, drivers of fully electric vehicles will pay 3p per mile, while hybrid drivers will be charged 1.5p per mile. The policy is designed to offset declining fuel duty revenue as more motorists switch to electric cars, ensuring all road users contribute fairly to road maintenance. However, critics argue that hybrid drivers will effectively be taxed twice: once through fuel duty at the pump, and again through the pay-per-mile charge.
Government Justification
A Department for Transport report stated: "Evidence indicates that PHEVs complete a smaller proportion of their journeys in electric mode than previously assumed." The report added: "All drivers should contribute to account for the wear and tear on our roads." It warned: "If we do nothing, then by 2030 around one in five car drivers are expected to pay no fuel duty at all."
Fuel Price Context
The tax announcement comes amid soaring fuel prices driven by the conflict in the Middle East. Since the conflict began, the price of diesel at UK pumps has increased by 35%, according to the RAC. Unleaded petrol has risen by 19% per litre. Currently, the average UK petrol price stands at 157p per litre, while diesel averages 190p per litre.
Public Reaction
Motoring groups and consumer advocates have criticised the hybrid tax, arguing it unfairly penalises drivers who already pay fuel duty. Many hybrid owners feel they are being targeted despite the government's previous encouragement to purchase low-emission vehicles. The policy is expected to be a key issue in upcoming political debates.
