New electric car tax could charge drivers by the mile from 2028

Electric car drivers are facing a major change to the way vehicles are taxed, with the Government planning to introduce a new mileage-based tax for electric vehicles from April 2028.

The new Electric Vehicle Excise Duty, known as eVED, is designed to replace some of the fuel-duty revenue that is expected to be lost as more motorists move from petrol and diesel cars to electric vehicles.

Under the current proposal, fully electric cars would pay 3p per mile, while plug-in hybrid cars would pay 1.5p per mile. The rates are expected to increase in line with inflation in future years.

This means an electric car driver travelling 10,000 miles a year would face an additional charge of around £300 a yearunder the proposed 3p-per-mile rate.

The new charge would be separate from existing vehicle tax. Electric and zero-emission cars have already been brought into the Vehicle Excise Duty system, with standard rates applying from April 2026.

The changes are likely to create further debate about the cost of switching to electric vehicles, particularly for drivers who charge their cars at home.

The Government has also been making changes intended to make home EV charging easier and cheaper, including planning reforms aimed at helping households without private driveways access charging.

However, the new mileage-based tax means that the cost of running an electric car will no longer simply be based on electricity, insurance, maintenance and existing vehicle taxation.

The Government says the system is intended to make motorists contribute towards the costs associated with roads as fuel-duty income declines.

For motorists, the important point is that the proposed eVED charge is not a special tax on using a driveway charger. It is a mileage-based vehicle tax that would apply regardless of whether the vehicle is charged at home or at a public charging point.

The Government's proposal is currently scheduled to begin on 1 April 2028.