Overview
- From April 2028, pure electric cars will be charged 3p per mile and plug‑in hybrids 1.5p per mile, with the rate indexed to inflation and miles driven abroad included.
- Drivers will pay an estimated amount up front with their road tax, then have mileage verified annually at MOTs, with separate checks required in years one and two for cars not yet subject to MOTs.
- The Budget pairs the levy with £1.3bn for the Electric Car Grant, £200m for chargers, an Expensive Car Supplement threshold rise to £50,000, and a Vehicle Excise Duty uplift from April 1, 2026, as the fuel duty freeze is extended to at least September 2026.
- The OBR warns the policy could sharply reduce EV sales even as it raises revenue, and industry and consumer groups say it narrows cost savings and hits drivers reliant on expensive public charging.
- Transport for London will remove the Congestion Charge Cleaner Vehicle Discount on December 25, 2025, making many electric cars chargeable in central London.