New Pay-Per-Mile Tax Announced for Electric Vehicle Owners
Chancellor Rachel Reeves has confirmed a new pay-per-mile levy targeting owners of electric vehicles (EVs) and plug-in hybrids, set to take effect in April 2028. The tax will impose a rate of 3p per mile for EVs and 1.5p per mile for plug-in hybrids, on top of standard vehicle excise duty.
Which Models Are Affected?
The charge will apply to popular EV models including the Tesla Model Y and 3, Audi Q4 and Q6 e-tron, Ford Explorer, and BMW i4. These vehicles represent some of the UK's best-selling electric cars, meaning millions of drivers could be impacted.
How Much Will Drivers Pay?
Based on the UK average annual mileage of around 8,000 miles, EV owners would face an additional £240 per year. However, those who drive more—such as commuters, rural residents, or people using their cars for work—will pay significantly more. The government argues that petrol and diesel drivers already pay based on mileage through fuel duty, making this a move toward fairness as EV adoption grows.
Government Rationale and Concerns
The new levy is a response to falling tax revenues as more motorists switch to electric vehicles. However, critics warn it could discourage the transition to EVs, undermining environmental goals. The Treasury maintains that the charge ensures all road users contribute to road maintenance and infrastructure.
