Drivers of electric and plug-in hybrid vehicles will face a new mileage-based charge starting in April 2028, Chancellor Rachel Reeves has confirmed. The new Electric Vehicle Excise Duty (eVED) will charge owners 3p per mile for electric cars and 1.5p per mile for plug-in hybrids.
For example, a driver covering 12,000 miles annually in an electric vehicle would pay £360 under the new system. This charge aims to address falling fuel duty revenues as more motorists switch to electric vehicles, ensuring all road users contribute fairly to road maintenance.
Currently, the average UK driver travels about 8,000 miles per year, which would result in a £255 charge for electric vehicle owners. However, those with longer commutes or living in rural areas are likely to pay more under this scheme.
READ MORE: DWP Urged to Act as One Million Pensioners Miss Out on £4,000 Pension Credit Boost
READ MORE: Fastest Speeds in West Midlands Reach Alarming 155mph as Reckless Drivers Defy Limits
Treasury minister Dan Tomlinson highlighted that eVED will be introduced alongside existing Vehicle Excise Duty (VED) and will not require tracking devices or complicated new tax systems. Instead, the mileage charge will be collected through familiar mechanisms alongside regular road tax payments.
The government maintains that this approach will promote fairness, as drivers who cover more miles are currently paying more through fuel duties. At the same time, setting the rates at half the equivalent fuel duty level for electric vehicles and half again for hybrids seeks to preserve incentives for switching to cleaner transportation.
While concerns remain that the charge could discourage electric vehicle adoption, the government emphasizes that eVED is designed to balance fairness and ongoing incentives for a greener future.