A proposed pay-per-mile charge for electric vehicle (EV) drivers has sparked concern among motorists and industry experts alike. John Wilmot, founder and CEO of car lease comparison site LeaseLoco.com, has raised alarms over the new scheme introduced by Labour Party Chancellor Rachel Reeves, warning it could discourage drivers from making the switch to EVs.
Starting in 2028, EV owners will be required to pay 3p per mile driven, a rate that is half the 6p per mile paid by petrol and diesel drivers through fuel duty. However, this new Vehicle Excise Duty (VED) system, known as eVED, means an EV driver covering roughly 8,000 miles annually would face a £240 charge each year—around £20 per month. In contrast, petrol and diesel drivers would pay about £480 annually, or £40 per month, in fuel duty for the same mileage.
Wilmot expressed concern that this pay-per-mile tax threatens to erase one of the primary financial benefits of electric cars. “One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay-per-mile tax risks eliminating that advantage, which could make drivers think twice about switching any time soon,” he said. He added that the timing sends mixed messages: while the government wants people to adopt EVs, challenges such as limited charging infrastructure and rising costs are already discouraging potential buyers.
READ MORE: 700 Years of History for Sale in the Midlands: Inside One of England’s Oldest Homes
READ MORE: Evil Walsall Stepmother Who Set Husband Alight in Brutal Arson Murder Dies in Jail
Under the current proposal, drivers would estimate their annual mileage when renewing their Vehicle Excise Duty, with MOT test readings used to verify and adjust payments. For vehicles under three years old—which do not require an MOT—mileage would need to be checked at an accredited provider, likely an MOT test centre.
Wilmot emphasized the importance of lower running costs in driving the EV market’s growth: “Lower running costs were a huge part of the incentive for going electric. Taking that away risks stalling the momentum we have built by giving people confidence in electric vehicles.”
In addition to the eVED plan, the government has announced a Cost of Public Charging Review, aimed at addressing high energy costs that drive up public charging prices. The review is expected to report in the Autumn.