What You Need to Know About the Rumoured New EV Tax

Electric car owners in the UK could soon face a new tax that might cost them around £250 a year, according to reports ahead of the autumn budget. The move is said to be part of the Treasury’s plan to replace lost revenue from fuel duty as drivers switch from petrol and diesel to electric vehicles.

What’s Being Proposed

Chancellor Rachel Reeves is reportedly considering introducing a 3p-per-mile charge for EV drivers.

If implemented, the plan could come into effect in 2028, following a consultation period.

That would mean:

About £12 for a trip from London to Edinburgh

Around £5 from Cambridge to Bristol

Roughly £2 for shorter regional journeys

With more than one million EVs already on UK roads—and up to 11 million expected by 2030—the government is looking for a fair way to make up for the £24.4 billion in fuel duty currently paid by petrol and diesel drivers each year.

Why It Matters

Fuel duty has long been a major source of government income, but with the ban on new petrol and diesel cars coming in 2030, that money stream will dry up. Officials say they want a “fairer system for all drivers” while still encouraging the shift to greener vehicles.

The government says it has invested £4 billion in EV incentives, including grants of up to £3,750 for eligible buyers.

What Experts Say

Industry leaders have warned that the move could slow down EV adoption if handled poorly.

• Edmund King (AA President) said the government should “tread carefully,” warning against a “poll tax on wheels.”
• Ginny Buckley (Electrifying.com) argued that ministers can’t “drive the EV transition with one foot on the accelerator and the other on the brake.”
• Steve Gooding (RAC Foundation) said if distance charging is introduced, public charging costs should be cut for drivers without home chargers.

What EV Owners Already Pay

Since April 2025, EV drivers have had to pay Vehicle Excise Duty (VED)—£195 per year—ending their previous exemption.

They also face electricity costs for charging, which vary by provider and speed.

On the plus side, insurance and maintenance tend to be slightly cheaper than for petrol or diesel cars.

The Bottom Line

The government is walking a tightrope: it needs to replace lost fuel duty revenue but must avoid discouraging the switch to electric. The final decision will come with the autumn budget later this month, and EV drivers are watching closely.