Drivers of electric vehicles (EVs) in the UK will be required to pay 3 pence per mile starting in April 2028, the government has confirmed. Owners of hybrid vehicles will face a lower charge of 1.5 pence per mile.
These new measures are designed to address a projected shortfall in public finances stemming from the increasing adoption of electric and hybrid vehicles, leading to a decrease in revenue from traditional fuel duties. Currently, fuel duty for non-electric cars equates to approximately 6 pence per mile.
The proposed system, referred to as "eVED" (electric Vehicle Excise Duty), is anticipated to be controversial. The scheme involves an initial upfront payment calculated based on estimated driver mileage. Motorists will have the option to spread these costs through monthly payments, similar to the existing Vehicle Excise Duty (VED) system.
At the end of each year, drivers will reconcile their actual mileage against their payments. This will be verified through mileage readings taken during the vehicle's annual MOT test. For new vehicles, mileage will be recorded around the second or third anniversary of their registration.
Drivers will be able to view their balance and either pay any outstanding amount or incorporate it into their payments for the following 12 months. For new electric cars, there will be an option to include the eVED mileage costs within the vehicle's on-the-road pricing, or drivers can manage this independently.
Under the current proposal, EV owners may also be subject to eVED charges when traveling abroad, as the system does not currently account for different driving locations. While not an immediate policy, the government has indicated it is open to exploring investigations into on-board telematics data that could enable real-time mileage reporting.
Vicky Edmonds from the Electric Vehicle Association England expressed dissatisfaction with the proposed scheme, stating that it "still does not work for drivers." She cited concerns about the complexity of the system, the potential for drivers to incur unexpected costs, and a lack of confidence-building measures for consumers. Edmonds urged ministers to simplify and clarify the system rather than proceeding with a policy that retains significant unresolved issues, particularly at a critical juncture in the transition to electric vehicles.