The average UK driver covers around 7,400 miles per year, according to the Department for Transport. However, Andy Burnham's continued commitment to the pay-per-mile electric vehicle duty (eVED) could leave drivers of premium EVs facing bills exceeding £800 annually.
The new 3p per mile car tax was confirmed by former Labour Party government Chancellor Rachel Reeves in her final Autumn Budget. Under it, electric vehicles (EVs) would be taxed at 3p per mile. At 3p per mile, the average BEV driver pays roughly £222 per year in eVED. Adding the standard £200 VED rate brings the total to approximately £422 annually before the expensive car supplement, which would push that figure above £800 for higher-value vehicles.
Which Drivers Are Most at Risk?
If your EV (or any car) had a list price above £50,000, you will pay an additional £425 per year for years two to six, on top of the standard rate. Car marketplace Cazoo cited Tesla, BMW, and Mercedes drivers as most at risk, stating: "That last point catches a lot of drivers off guard. Given that many popular EVs, including various Tesla, BMW, and Mercedes models, exceed the £50,000 threshold, a meaningful chunk of EV owners will be paying over £600 a year in VED before eVED even launches."
eVED Rates Set to Rise
The eVED scheme will not be fixed at 3p and 1.5p for long. As part of its consultation response, Mr Burnham's Government says that "the rate will be uprated in 2029-30 and in future years in line with CPI (Consumer Price Index) inflation." This means the tax burden on EV drivers is expected to increase over time.
Government Signals Flexibility on ZEV Mandate
Jonathan Reynolds, who has returned to the role of business secretary under Andy Burnham, has indicated that the government is likely to water down the Zero Emission Vehicle (ZEV) mandate. "They’re waiting for the mandate, certainly," said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), when asked about manufacturers’ plans. "There’s investment decisions on next model, next generation, which need a resolution, need an easing of the mandate."
UK Vehicle Production Declines
The SMMT’s latest figures, published on Thursday, show that UK vehicle production fell 7.5% in the first half of 2026 compared with a year earlier, with factories producing 386,000 cars and commercial vehicles. This decline underscores the challenges facing the automotive industry amid policy uncertainty.
