Close to one million motorists across the United Kingdom have been alerted to a looming surge in driving expenses, following tax reforms unveiled in Chancellor Rachel Reeves' Autumn Budget.
The New 'Pay-Per-Mile' EV Tax
The central change, set to take effect from April 2028, is the introduction of an Electric Vehicle Excise Duty. This new levy will function as a mileage-based charge specifically for battery electric and plug-in hybrid car owners. Crucially, this fee will be an additional cost on top of the standard Vehicle Excise Duty that drivers already pay.
This announcement forms part of a broader fiscal adjustment that also includes a confirmed rise in fuel duty. Sheena McGuinness, co-head of energy and natural resources at RSM UK, described the combined impact as a "post-budget double whammy" for drivers.
"We could start to see the demand for hybrid vehicles taper off," McGuinness stated. "It will be interesting to see whether these policy changes encourage drivers to switch to fully electric motoring or whether we see demand revert to petrol cars."
Industry Calls for Clarity and Support
The automotive industry has responded with concern, warning that the new tax sends conflicting messages to consumers. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), pointed to the mixed signals being sent to the market.
"Government has stepped in with the Electric Car Grant, but a new EV tax, additional charges for EV drivers in London and costly public charging send mixed signals," Hawes said. He urged the government to "bring forward its review and act urgently" to ensure the UK remains competitive, especially in light of the EU's recent decision to relax its ban on new petrol and diesel cars.
This international policy shift may lead some UK consumers to delay their switch to electric power, awaiting potential similar changes from the UK Government.
Campaign Aims to Tackle EV Misconceptions
Amidst this budgetary uncertainty, a major new campaign has launched to address common fears about electric vehicles. The AA has joined forces with Autotrader, ChargeUK, and the SMMT for the "Electric Cars: The Facts" initiative, which is endorsed by the Labour government's Department for Transport.
The campaign seeks to use data to dispel myths, particularly around reliability. Edmund King, AA president, highlighted that running out of charge is a minor and declining cause of breakdowns for EVs.
"For many drivers, the switch to electric is a big step, and some are understandably hesitant. However, one thing prospective electric drivers don't need to worry about is breaking down," King asserted. He cited the AA's extensive database, which shows such incidents have "fallen dramatically since 2015."
Campaign data revealed specific demographic concerns:
- 56% of people aged 75 and above expressed worries about potential EV breakdowns.
- Women were more likely to be concerned (46%) compared to men (41%).
- Geographically, the North East was the most apprehensive region, with 52% of respondents anxious about roadside repairs.
As the 2028 deadline approaches, the interplay between new taxation policies and efforts to build consumer confidence will be critical in shaping the UK's transition to electric motoring.
