UK's Proposed 3p/Mile Pay-Per-Mile EV Tax from 2028: Road Funding Solution or EV Adoption Barrier?

So, the UK is talking about a new tax for electric cars, starting in 2028. It's a 'pay-per-mile' thing, about 3 pence for every mile you drive. They say it's to help pay for roads since fewer people will be buying gas. But, is this really a good idea? Will it make people think twice about buying an electric car? We're going to break down what this UK pay-per-mile EV tax at 3p/mile from 2028: Fair road funding or EV adoption killer? means for everyone.

Key Takeaways

• Starting April 2028, electric cars in the UK will face a new 'electric Vehicle Excise Duty' (eVED), a tax of 3 pence per mile driven. Plug-in hybrids will be charged 1.5 pence per mile.

• This new tax aims to replace lost revenue from fuel duty as more drivers switch to electric vehicles, helping to fund road maintenance and infrastructure.

• The government states that even with the new tax, electric cars will still be cheaper to run than petrol cars, with the average EV driver expected to pay around £255 per year.

• Privacy is a concern for some, but the government says the eVED system will use MOT checks, not GPS tracking, to monitor mileage, protecting drivers' personal data.

• While the tax is intended to be fair, critics worry it could slow down the adoption of electric vehicles, especially for those who drive long distances or live in rural areas.

The Evolving Landscape of EV Incentives and Taxation

Subsidy-Driven Growth and Its Limitations

The UK's electric vehicle (EV) market has seen some serious growth lately, and a big part of that is thanks to government incentives. Things like the Electric Car Grant, which used to knock a good chunk off the price of new EVs, really helped people consider making the switch. It made EVs feel more accessible, not just for the super-rich, but for more everyday folks too. By October 2025, electric cars were making up a decent slice of new car sales, and plug-in hybrids were doing pretty well too. It’s clear that when the upfront cost comes down, people are more willing to go electric.

But, relying only on subsidies isn't really a long-term plan, is it? The government has been tweaking these incentives, like bringing back the grant in mid-2025 but also ending the tax exemption for EVs in April 2025. It shows they're trying to balance making EVs affordable with the need to bring in money for roads and services. Some folks in the industry are worried that if these subsidies disappear too quickly, or if the rules change suddenly, it could really shake things up, especially for smaller companies. It's a tricky balance to strike.

The push for EVs has been strong, fueled by financial carrots from the government. However, the sustainability of this approach is being questioned as the focus shifts towards how to fund road maintenance and infrastructure in the long run.

The Proposed Pay-Per-Mile Tax: Rationale and Rates

So, why the talk about a 3p-per-mile tax for EVs? Well, the government is looking at a pretty big hole in its budget because fewer people are buying petrol and diesel cars, which means less money coming in from fuel duty. They estimate this shortfall is in the billions each year. The idea behind the proposed tax, sometimes called electric Vehicle Excise Duty (eVED), is to make sure EV drivers contribute their fair share to road upkeep, just like drivers of traditional cars do. It's meant to be a way to keep funding roads as more people switch to electric.

Right now, the proposal is for 3 pence per mile. When you break it down, that's about half of what petrol car drivers pay in fuel duty. For the average EV driver, who covers around 8,500 miles a year, this could mean an extra £255 on their annual car costs starting from April 2028. It’s a significant change, and it’s definitely something people are talking about, especially those who drive longer distances. The government says this is about fairness for all road users.

Balancing Fiscal Needs with EV Adoption Goals

This is where things get complicated. The government needs money to maintain roads and build new infrastructure, and the fuel duty just isn't cutting it anymore. A pay-per-mile tax seems like a logical way to get that revenue. But, at the same time, they want to encourage more people to buy EVs to meet climate goals and reduce emissions. Introducing a new tax, even a relatively small one, could make some potential EV buyers think twice. It’s a real balancing act. They're trying to figure out how to collect the money they need without scaring people away from electric cars.

There’s a lot of discussion about how this tax will actually work and what impact it will have. Will it slow down the adoption of electric vehicles? Or will the benefits of owning an EV, like lower running costs and environmental advantages, still outweigh the new tax? It’s a question that many drivers and industry experts are trying to answer as we get closer to 2028. The government has also mentioned a support package to help offset some of these costs, which is something to keep an eye on. The goal is to keep the transition to electric vehicles moving forward.

Understanding the UK's Proposed 3p/Mile EV Tax

So, the government's got this new idea for electric cars, right? Starting in April 2028, they want to introduce something called electric Vehicle Excise Duty, or eVED for short. Basically, it's a pay-per-mile system. Instead of paying a flat rate each year like we do now with regular car tax, you'll pay based on how many miles you actually drive. This is a pretty big shift from how we've taxed cars up to this point.

Electric Vehicle Excise Duty (eVED) Explained

The whole point behind eVED is that as more people switch to electric vehicles (EVs), the government collects less money from fuel duty. Fuel duty is that tax you pay at the pump for petrol and diesel, and it's a major source of funding for road maintenance and improvements. With fewer petrol cars on the road, that income stream shrinks. So, eVED is the government's proposed solution to make sure there's still money available for our roads.

Here's the breakdown:

• Battery Electric Vehicles (BEVs): These will be charged at 3 pence per mile.

• Plug-in Hybrid Vehicles (PHEVs): These will be charged at 1.5 pence per mile. This is because they still use petrol sometimes and therefore contribute to fuel duty.

• Implementation Date: Mark your calendars for April 1, 2028.

• Privacy: Don't worry, they've said there won't be any GPS tracking. Your mileage will likely be reported during your car's MOT test.

This new tax system is designed to be more equitable, ensuring that all road users contribute to the upkeep of the road network, regardless of their vehicle's power source. It's a move towards a future where road funding aligns with actual usage.

Comparing EV Tax to Traditional Fuel Duty

It's helpful to see how this new 3p/mile charge stacks up against what petrol and diesel drivers currently pay. Right now, fuel duty on petrol and diesel works out to roughly 6 pence per mile. So, the proposed eVED rate for pure EVs is about half of that. That sounds pretty good, but it's still an added cost that wasn't there before.

Let's look at some numbers for an average driver:

Mileage per Year	eVED Cost (3p/mile)	Equivalent Petrol Tax (approx. 6p/mile)
5,000 miles	£150	£300
8,500 miles (UK avg)	£255	£510
15,000 miles	£450	£900
20,000 miles (high mileage)	£600	£1,200

As you can see, even with the new tax, EVs still work out cheaper in terms of road tax compared to petrol cars, assuming similar mileage. But it's an extra expense to factor in, especially for those who drive a lot.

Implementation Timeline and Key Dates

The big date to remember is April 1, 2028. That's when the eVED system officially kicks in for electric cars. Before that, there's a period where the government has been consulting on the details, and now the rates and the general approach have been confirmed. The plan is also to adjust the tax with inflation each year after 2029, so the real cost of the tax doesn't decrease over time. It's all part of making sure the funding for roads stays consistent as the vehicle landscape changes.

Financial Implications for Electric Vehicle Owners

So, what does this proposed 3 pence per mile tax actually mean for your wallet if you're thinking about going electric, or if you already have? It's a big question, and honestly, it's not as straightforward as just adding up the miles.

Calculating the Annual Cost of eVED

Let's break it down. The government is talking about a 3p per mile charge for fully electric vehicles, which they're calling Electric Vehicle Excise Duty (eVED). If you drive an average of, say, 8,500 miles a year – which is pretty standard for many folks – that works out to about £255 annually. That's not nothing, but it's important to see how it stacks up against other costs.

• Average Driver: Around 8,500 miles/year = ~£255 annually.

• Higher Mileage Driver: If you're doing more like 12,000 miles a year, you're looking at roughly £360 annually.

• Lower Mileage Driver: Someone doing only 5,000 miles might only pay about £150 per year.

It really depends on how much you use your car. If you're mostly doing short trips around town, the impact will be pretty small. If you're regularly taking long journeys or have a long commute, that annual figure will climb.

Impact on Average and High-Mileage Drivers

For the average driver, that £255 annual cost might feel like a noticeable increase, especially when you compare it to the zero road tax EVs currently enjoy. However, it's crucial to remember that this tax is slated to start in 2028. By then, the landscape of EV ownership might look quite different, with more charging infrastructure and potentially lower purchase prices.

High-mileage drivers, those who really rack up the miles, will feel this tax more keenly. An extra £360 or more per year could be a significant factor in their running costs. This is where the debate really heats up – is this fair for people who rely on their cars for work or live in areas with fewer public transport options?

The government is trying to balance the books as fuel duty revenue shrinks. They see this as a way to make sure everyone contributes to road maintenance and infrastructure, regardless of what powers their car. It's a shift from taxing fuel to taxing road usage directly.

Cost Comparison: EVs with eVED vs. Petrol Cars

This is where things get interesting. Even with the proposed 3p per mile tax, electric cars are still expected to be cheaper to run than their petrol counterparts. For example, petrol cars currently pay around 6p per mile in fuel duty. So, even at 3p per mile, an EV driver is still paying half the rate of a petrol driver in terms of mileage-related tax.

Let's look at a simplified comparison for an average driver (8,500 miles/year):

Vehicle Type	Annual Mileage Tax (Est.)	Notes
Electric Vehicle (EV)	~£255 (at 3p/mile)	Proposed eVED from 2028. No current VED or Congestion Charge.
Petrol Car	~£510 (at 6p/mile)	Current fuel duty. Subject to VED and potential Congestion Charge.

Remember, this is just one piece of the puzzle. EVs often have lower maintenance costs, cheaper servicing, and can benefit from things like salary sacrifice schemes which significantly reduce the overall cost of ownership. So, while the 3p per mile tax is a new expense to consider, the overall financial picture for EVs is still looking pretty good compared to traditional cars, especially when you factor in the government's other support measures announced alongside this proposal.

Addressing Concerns: Privacy and Fairness

So, the government's thinking about this 3p-per-mile tax for electric cars, and naturally, people have questions. It's not just about the money, right? There are some pretty big worries about how this would actually work and if it's fair for everyone.

Mileage Verification Without GPS Tracking

One of the biggest hurdles is figuring out how to track mileage without making drivers feel like they're constantly being watched. Nobody wants their every move logged. The government says they're looking into ways to verify mileage that don't involve constant GPS monitoring. This could mean:

• Self-reporting with random checks: Drivers report their mileage, and the tax authority does occasional audits.

• OBD-II port data: Using the car's onboard diagnostics port to read mileage, which is less intrusive than live GPS.

• Annual inspections: Similar to MOT tests, mileage could be recorded during yearly vehicle checks.

The goal is to find a system that's accurate enough for tax collection but respects drivers' privacy. It's a tricky balance, for sure.

Ensuring Equitable Road Usage Contributions

Is this tax really going to make everyone pay their fair share for using the roads? That's the million-dollar question. Right now, petrol car drivers pay fuel duty, which helps fund road maintenance. As more people switch to EVs, that fuel duty income drops. This new tax aims to fill that gap, but some worry it might disproportionately affect certain groups.

• Rural drivers: People living in the countryside often drive longer distances and might not have many public transport options. This tax could hit them harder.

• High-mileage commuters: Those who drive long distances for work, even in urban areas, will see their costs go up significantly.

• Low-income households: While the government claims the overall policy benefits lower-income households, a flat per-mile charge could still be a burden if not structured carefully.

The idea is to shift from taxing fuel to taxing road use directly. This makes sense as the number of electric vehicles grows, but the transition needs to be smooth and consider the varied driving habits across the country. It's about making sure the system doesn't create new inequalities while trying to solve an old problem.

The Role of Plug-in Hybrid Taxation

What about plug-in hybrids (PHEVs)? These cars use both electricity and petrol. How will they be taxed under this new system? It's not as simple as taxing a pure EV or a petrol car. The government needs a clear plan for PHEVs, perhaps taxing them based on a combination of electric and petrol mileage, or a different rate altogether. This is another area where the details will matter a lot for fairness. Getting this right is important for the green transition.

Ultimately, the success of this proposed tax hinges on its implementation. If the privacy concerns are addressed and the system is perceived as fair, it might just work. But if it feels intrusive or unfairly burdens certain drivers, it could become a major roadblock for EV adoption.

The Debate: Road Funding Solution or EV Adoption Barrier?

So, the big question is whether this new 3p-per-mile tax for electric cars, set to kick in around 2028, is actually a good idea for the UK. On one hand, the government says it's about making sure everyone pays their fair share for road upkeep, especially since fuel duty income is dropping as more people switch to EVs. They're talking about generating steady money for roads and other services. It makes sense, right? We all use the roads, so we should all chip in.

Arguments for the Pay-Per-Mile Tax

• Fairness: Proponents argue it creates a more equitable system. Currently, EV drivers don't pay fuel duty, which has historically funded road maintenance. This tax aims to level the playing field.

• Revenue Generation: The government needs money to fix potholes and improve infrastructure. This tax is seen as a reliable way to secure that funding long-term, especially as EV numbers grow.

• Encouraging Efficient Use: Some suggest that paying per mile might make people think twice about unnecessary trips, potentially reducing congestion and wear on roads.

Criticisms and Potential Deterrents to EV Adoption

But here's the rub: many people are worried this tax will actually slow down the switch to electric cars. We've seen a big push with subsidies and incentives to get people into EVs, and then suddenly hitting them with a new tax might feel like a bait-and-switch. For folks who drive a lot, especially those in rural areas where public transport isn't great and longer commutes are the norm, this could add up to a significant yearly cost. Imagine adding an extra £250 or more to your annual car expenses – that's not pocket change.

• Reduced Affordability: The added cost could make EVs less attractive compared to traditional cars, especially for budget-conscious buyers.

• Rural Impact: Drivers in rural areas often cover more miles and have fewer transport alternatives, making them disproportionately affected.

• Privacy Concerns: While the government says they won't use GPS tracking and will rely on MOT checks, the idea of mileage verification still makes some people uneasy about data collection.

The core tension lies in balancing the need for road funding with the government's stated goal of encouraging EV adoption. If the tax is too high or implemented poorly, it could undermine years of effort and investment in promoting cleaner transport.

Industry Perspectives on the Proposed Tax

Car manufacturers and industry groups are watching this very closely. They've invested heavily in EV technology and marketing, often relying on government support to make EVs competitive. A sudden tax could disrupt their plans and make it harder to sell new electric models. They're pushing for a gradual approach and want to make sure the revenue generated actually goes back into improving EV infrastructure, like charging points, so it feels like a worthwhile trade-off. It's a tricky balancing act, for sure.

Policy Tensions and Market Resilience

The UK's push towards electric vehicles (EVs) is a balancing act, and the proposed 3p/mile tax really highlights this. On one hand, the government wants to keep encouraging people to switch to EVs, which is great for the environment and all that. But then, they also need to figure out how to pay for road maintenance and infrastructure, especially as fuel duty income drops. It's a bit of a pickle, isn't it?

The Interplay of Subsidies and Taxation

For years, subsidies have been the main driver for EV adoption. Think grants, tax breaks – the whole shebang. They've worked, no doubt about it. We've seen a big jump in EV sales, and that's fantastic. But these subsidies aren't free money, and they can't go on forever. The government is now looking at ways to make the system more sustainable, and that's where taxes like the proposed mileage charge come in. The big question is whether slapping on a new tax, even a relatively small one, will scare off potential buyers who've gotten used to the perks. It's like offering a free dessert and then charging for the coffee afterwards – some people might just skip the coffee.

The government faces a tricky situation: how to fund essential road upkeep without discouraging the very shift to cleaner transport it's been promoting. This delicate balance is key to the long-term success of electric mobility in the UK.

Investor Sentiment Amidst Policy Uncertainty

Investors are watching this closely. On the one hand, the EV market is booming. Record sales in 2025 showed just how much appetite there is. But then there's the uncertainty. Will the government stick with its plans? Will the tax rates change? This kind of uncertainty makes investors a bit nervous. They like clear, stable policies. Abrupt changes, like suddenly ending incentives, could really shake things up, especially for smaller companies or those making niche EVs. It's a bit like trying to invest in a company whose CEO changes every six months – you just don't know what's coming next. They're looking for signs that the government is committed to a stable EV transition, not just short-term fixes.

Long-Term Fiscal Sustainability Challenges

Ultimately, this is about making sure the UK's roads are funded properly for years to come. Relying solely on fuel duty just isn't going to cut it as more people switch to electric. The proposed mileage tax is one idea to plug that gap. But it needs to be done right. If the tax is too high, or if people don't trust how the money is being used, it could backfire. The government needs to show that this isn't just about grabbing cash, but about a sensible plan for the future. They've also got to consider things like implicit liabilities, which are basically potential future costs the government might have to cover. Managing these financial risks is part of the bigger picture for long-term stability.

Strategic Considerations for EV Buyers and Investors

So, you're thinking about buying an electric car, or maybe you're looking to invest in the EV scene? It's a smart move, but things are getting a bit complicated with these new tax ideas. The government's talking about a 3p per mile charge for EVs starting in 2028, and it's got everyone scratching their heads. This isn't just about a small fee; it could really change the financial picture for EV owners and how investors see the market.

The Value of Electric Car Salary Sacrifice Schemes

Salary sacrifice schemes have been a big win for getting more EVs on the road. They let people get electric cars for less, often saving a good chunk of money compared to buying outright. Plus, the tax benefits, like the low Benefit-in-Kind (BiK) rate, have been a major draw. These schemes are likely to remain attractive, even with the new per-mile tax, especially if the overall savings still outweigh the added costs. For instance, a Tesla Model Y, even with the new charges, can still offer significant savings when you factor in the reduced BiK rate and the fact that you'll be paying the new tax for less than a year on a typical three-year lease. It's all about looking at the total package.

Geographic Disparities and Rural Impact

Let's be real, this new tax could hit some people harder than others. If you live out in the sticks, you probably drive more miles just to get anywhere. Think about folks in rural areas who don't have many public transport options – they might end up paying a lot more under a pay-per-mile system. We're talking about potentially an extra £250 a year for some, which is a pretty big deal when you're already dealing with higher running costs for longer commutes. This could make EVs less appealing for those who need them most for practical reasons.

Navigating Policy Volatility for Future Investments

For anyone thinking about investing in the EV sector, it's a bit of a mixed bag right now. On one hand, the market is growing like crazy, with sales hitting new highs. But then you have these policy shifts, like the proposed tax, that can create uncertainty. Companies that are heavily reliant on government grants might be more exposed if those subsidies change. It makes sense for investors to look at areas that are less dependent on direct subsidies, like charging infrastructure or battery recycling. The government's commitment to EV attractiveness is there, but balancing that with the need for road funding is a tricky dance.

The UK's push towards electric vehicles is a complex balancing act. While incentives have spurred growth, the introduction of new taxes like the proposed 3p/mile charge raises questions about long-term affordability and accessibility. For consumers and investors alike, understanding these evolving financial landscapes is key to making informed decisions in the transition to electric mobility. The government's challenge is to create a sustainable funding model for roads without deterring the very adoption it aims to encourage.

Here's a quick look at how the new tax might stack up:

Annual Mileage	Estimated Annual eVED Cost (3p/mile)	Notes
5,000 miles	£150	Low-mileage city driver
10,000 miles	£300	Average UK driver
15,000 miles	£450	Higher-mileage driver
20,000 miles	£600	Very high-mileage driver

It's important to remember that this is on top of any existing Vehicle Excise Duty (VED) that might apply, though most EVs currently pay zero VED. The proposed Electric Vehicle Excise Duty (eVED) aims to bring EV taxation more in line with traditional vehicles over time.

The Future of Road Funding in an Electrified Era

So, the big question is, how do we keep our roads in good shape when fewer people are buying petrol cars? It’s a puzzle the government is trying to solve, and this new EV tax is part of their answer. With fuel duty income dropping, they need a new way to pay for all those potholes and road repairs. The idea is that the money from this new electric vehicle excise duty (eVED) will go straight back into fixing and improving the roads we all use. They're talking about doubling the funding for local councils to tackle potholes, which sounds pretty good, right?

Sustaining Infrastructure with Declining Fuel Duty

This whole shift to electric cars is great for the environment, no doubt about it. But it does mess with the old way of paying for roads. For years, fuel duty has been a steady source of cash for road maintenance. Now, as more EVs hit the streets, that income stream is shrinking. It’s like a leaky bucket – you can’t rely on it like you used to. The government is looking at this eVED as a way to plug that hole. They figure if you drive an EV, you should contribute to the roads just like anyone else, and this tax is their proposed method. It’s a tough balancing act, trying to encourage green travel while still having the cash to keep the country moving.

The Government's Commitment to EV Attractiveness

Even with the new tax coming in 2028, the government is still trying to make EVs appealing. They've put a lot of money into things like the Electric Car Grant, which helps people buy electric cars in the first place. Plus, they're extending funding for programs that support UK car manufacturing, hoping to keep the country competitive in the electric vehicle space. They've also made some changes to the rules around expensive electric cars and employee car ownership schemes, trying to ease the financial burden for some drivers and businesses. It seems like they want to keep the EV momentum going, even as they introduce new ways to collect revenue.

The government is trying to signal that while the way we pay for roads is changing, the overall push towards electric vehicles isn't stopping. They're investing in infrastructure and manufacturing, aiming for a future where electric transport is the norm, and the funding for that transition is secured.

The Path Forward: Balancing Revenue and Transition

So, what does this all mean? It means the road ahead for EVs in the UK is going to involve some adjustments. The proposed 3p-per-mile tax is a big change, and it’s understandable why people have questions about it, especially concerning privacy and how it might affect drivers who cover a lot of miles.

Here’s a quick look at what’s on the table:

• Revenue Generation: The primary goal is to create a stable funding source for road maintenance and improvements.

• Fairness: The aim is to ensure all road users contribute to the upkeep of the road network, regardless of their vehicle type.

• EV Adoption: The government is trying to implement this without completely derailing the progress made in encouraging people to switch to electric vehicles. They've even extended some support measures, like the Electric Car Grant, to help offset costs.

It’s a complex situation, and the success of this new tax will really depend on how it’s implemented and whether the government can address the concerns people have. We'll have to wait and see how it all plays out, but one thing's for sure: the way we fund our roads is changing, and electric cars are right in the middle of it. The government is committed to supporting the EV transition and ensuring the infrastructure is there for the long haul.

The Road Ahead: Balancing Progress and Practicality

So, where does this leave us with the UK's electric car plans? It's a bit of a mixed bag, really. On one hand, we've seen a big push to get more EVs on the road, and that's a good thing for the environment. But then comes this new tax idea, the 3p-per-mile charge starting in 2028. It's meant to help pay for roads, which makes sense, but there's a real worry it could make people think twice about buying an electric car, especially if they drive a lot or live somewhere without great public transport. The government says it'll still be cheaper than paying for petrol, and there's a lot of support still in place, but it's a tricky balance. Ultimately, how well this works out will depend on the details and whether the government can make sure that funding roads doesn't accidentally put the brakes on going green.

Frequently Asked Questions

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

Starting in April 2028, the UK government will introduce something called electric Vehicle Excise Duty, or eVED. It's a way to charge drivers of electric and plug-in hybrid cars based on how many miles they drive. Fully electric cars will be charged 3 pence per mile, and plug-in hybrids will pay 1.5 pence per mile. This is meant to replace the money the government used to get from taxes on gasoline and diesel fuel, which is decreasing as more people buy electric cars.

How much will this new tax actually cost me each year?

The cost depends on how much you drive. For the average driver in the UK, who travels about 8,500 miles a year, the tax will be around £255 annually. If you drive less, say 5,000 miles, it'll be about £150. If you drive a lot, like 20,000 miles, it could be around £600. It's important to remember that this is still generally less than what petrol car drivers pay in fuel taxes for the same distance.

Will this make electric cars more expensive than petrol cars?

Even with the new tax, electric cars are expected to remain cheaper to run than petrol cars. The government is also providing other support, like tax breaks for company car schemes, which can save drivers a lot of money. Plus, electric cars often have lower running costs for things like maintenance and electricity compared to petrol. So, while there's a new tax, the overall cost advantage for electric vehicles should continue.

How will the government know how many miles I've driven? Will they track me?

No, the government has said they won't use GPS tracking or require cars to have special devices to monitor your location. The plan is to collect mileage information when you renew your car's registration (like the MOT test). You'll likely estimate your yearly mileage then, and pay the tax along with your regular vehicle tax. There will be a system to check this information, but it's designed to protect your privacy.

Why is the government introducing this tax now?

The main reason is that as more people switch to electric cars, the government collects less money from taxes on petrol and diesel. This money is used to pay for roads and other public services. With fewer people buying traditional fuel cars, the government needs a new way to fund road maintenance and improvements. This mileage tax is seen as a fairer way to make sure all drivers contribute, no matter what kind of car they drive.

What about plug-in hybrid cars? Do they pay the same rate?

Plug-in hybrid cars will pay a lower rate of 1.5 pence per mile. This is because they still use petrol and pay fuel duty on those miles, while also using electricity. The government decided on this lower rate to encourage people to use the electric part of their hybrid car more and to make the transition to fully electric vehicles smoother.

Should I still buy an electric car before this tax starts in 2028?

Yes, most experts say it's still a good idea to buy an electric car now. If you use a salary sacrifice scheme to get an electric car, you can benefit from current tax rules and exemptions for several years before the new tax even begins. Waiting might mean missing out on significant savings and delaying the advantages of lower running costs and environmental benefits that come with driving an EV.

Will the tax rate go up in the future?

Yes, the plan is to increase the tax rate each year starting from 2029-2030. This will be done in line with inflation, similar to how fuel taxes have been adjusted in the past. This ensures that the tax continues to bring in the same amount of money in real terms over time, helping to keep road funding stable.