The UK government has confirmed plans to introduce a new mileage charge for electric and hybrid vehicles, set to take effect in April 2028. Drivers of fully electric vehicles will be charged 3 pence per mile, while owners of hybrid vehicles will face a lower rate of 1.5 pence per mile.
This initiative is designed to compensate for the anticipated decline in fuel duty revenue as more drivers transition away from petrol and diesel vehicles. For comparison, the current fuel duty for non-electric cars is approximately 6 pence per mile.
The proposed scheme, termed eVED (electronic Vehicle Excise Duty), will involve an upfront payment based on estimated driver mileage. Motorists will have the option to pay this charge monthly, similar to existing vehicle tax arrangements. At the end of each year, drivers will submit an actual mileage reading, which will be verified through the vehicle's annual MOT test or, for newer cars, during their second or third registration anniversary. Drivers will then settle any outstanding balance or can opt to spread the cost over the subsequent 12 months. For new electric cars, there will be an option to incorporate the eVED mileage costs into the vehicle's initial on-the-road pricing.
Under the new system, EV owners may also be required to pay eVED when traveling abroad, as the charges are not dependent on the location or time of driving. While not currently implemented, the government has indicated it is open to exploring the use of on-board telematics data for real-time mileage reporting.
Representatives from the Electric Vehicle Association England have expressed concerns that the proposed system remains overly complex and may not adequately serve drivers. They argue that at a critical juncture for EV adoption, the system should be simplified and made more transparent, rather than proceeding with a policy that retains significant unresolved issues.