EV tax changes: pay-per-mile charges explained

Pay-per-mile tax for electric cars: what drivers need to know

Electric vehicles (EVs) have become an increasingly common sight on UK roads, but the way they're taxed is changing. 

From April 2028, drivers of electric cars and plug-in hybrids will face a new mileage-based tax known as Electric Vehicle Excise Duty (eVED).

So, how will the new pay-per-mile tax work, how much could it cost you, and what else is changing for electric car drivers? Here's what we know so far.

What is the new pay-per-mile tax for electric cars?

Electric Vehicle Excise Duty, or eVED, is a new tax based on the number of miles you drive. 

It's being introduced because drivers of petrol and diesel vehicles contribute to government revenue through fuel duty on the fuel they buy. As more drivers move to electric vehicles, the amount generated through fuel duty is expected to fall.

The government says eVED is designed to address this by introducing a mileage-based charge for electric vehicles.

The new tax will come into effect on 1st April 2028 and will be charged in addition to standard Vehicle Excise Duty (VED).

How much will EV drivers pay per mile? 💰

When the scheme launches, the rates will be: 

• Battery electric cars: 3p per mile 
• Plug-in hybrid cars: 1.5p per mile

Hydrogen fuel cell cars will also be charged at 3p per mile. From the 2029/30 tax year onwards, the rates are set to increase in line with inflation. 

That means an electric car covering 10,000 miles a year would initially face an eVED bill of around £300 a year, while a plug-in hybrid covering the same distance would pay around £150, before any future increases.

Here are a few examples:

Annual mileage	Electric car	Plug-in hybrid
5,000	£150	£75
8,000	£240	£120
10,000	£300	£150
12,000	£360	£180

Does this mean electric cars will become more expensive to run? 🚗

For many EV drivers, eVED will add another cost to factor into their annual motoring budget from 2028. 

However, it's important to consider the overall cost of running an electric vehicle rather than looking at the new tax in isolation. 

Charging costs, mileage, insurance, maintenance, and where you charge your vehicle can all affect how much an EV costs to run. For example, a driver who can regularly charge their car at home may have a very different experience from someone who depends primarily on public rapid charging. 

So, if you're thinking about switching to an EV, it's worth looking at your likely total running costs and considering how you expect to use the vehicle.

Is the Electric Car Grant still available?

The introduction of eVED doesn't mean government support for electric cars has disappeared. 

The Electric Car Grant was introduced in July 2025 to reduce the upfront price of eligible new electric cars, with discounts available depending on the vehicle and its eligibility. 

If you're considering buying a new EV, it's worth checking whether the particular make and model you're looking at qualifies for support, rather than assuming every electric vehicle will receive the same discount.

What about the cost of charging an electric car? 🪫

Where you charge is another important consideration when working out the cost of owning an EV. 

Home charging can often be a convenient option for motorists with access to a driveway or suitable off-street parking. Drivers who don't have access to home charging are more reliant on the UK's growing network of public charge points. 

The government is continuing to invest in expanding public charging infrastructure, while measures have also been announced to make some lower-powered public charging more affordable. 

However, the amount you pay can vary considerably depending on the type of charger and charging provider you use.

Will EVs still be worth considering?

The introduction of another motoring tax may understandably leave some drivers wondering whether switching to electric still makes financial sense. 

There's no single answer because it depends on your circumstances.

Your annual mileage, access to home charging, electricity tariff, choice of vehicle, and typical journeys can all influence your running costs. 

For example, at the proposed initial eVED rate, someone driving an electric car for 5,000 miles a year would pay around £150 in mileage-based tax. Someone covering 15,000 miles would pay around £450.

That's why comparing the complete cost of owning and running different vehicles is important when deciding whether an EV is right for you.

 

The new tax isn't due to take effect until 1st April 2028, and more practical information is likely to become clearer as time goes on.

But if you're planning to buy an electric or plug-in hybrid car that you expect to keep beyond 2028, the new mileage charge is worth including in your calculations. 

Ultimately, electric motoring is continuing to change. While EV drivers will face a new tax, developments in grants, charging infrastructure, and the electric car market mean there are plenty of other factors to consider before deciding what works best for you.