Electric vehicle tax explained

The car tax exemption for electric vehicles (EVs) was scrapped in April 2025.

However, the government is planning new tax rules for EV drivers to be introduced in April 2026 and beyond. We'll look at these new rules and what it all means if you own an EV.

How much will EV drivers pay for road tax?

The new taxes for EVs are:

• Electric, zero, or low-emission cars registered on or after 1 April 2025. You'll pay £10 from 1 April 2025. From the second payment onwards, you'll pay £195. This is the standard rate.
• Electric, zero, or low-emission cars registered between 1 April 2017 and 31 March 2025. You'll pay the standard rate of £195.
• Electric, zero, or low-emission cars registered between 1 March 2001 and 31 March 2017. You'll pay £20 to tax these vehicles.

Why are EVs being taxed?

Nearly half of what motorists pay for fuel is tax. The rate of fuel duty is 52.95p per litre, but this is set to rise in September 2026. The average price of petrol at the time of writing is 153.2p per litre*.

The demand for electric vans and cars has accelerated over the past few years. In fact, over 473,000 electric vehicles were registered in 2025 with a market share of 23.4%. But motorists could be put off buying EVs because of the new tax.

What are the costs for EV owners?

Here are some of the main costs for EV owners:

• Initial price: EVs are expensive. GOV.UK says that one in three used electric cars are under £20,000, and 21 brand-new cars on the market are under £30,000.
• Charging: The government says that drivers can save up to £750 a year if they mostly charge their car at home compared to petrol. But this could still increase your electricity costs overall.
• Electric vehicle insurance: EVs used to be more expensive to insure compared to petrol and diesel cars. However, according to Confused.com data**, the average annual comprehensive car insurance premium for electric vehicles is now £590. This is comparable to diesel (£594) and petrol (£584) vehicles. 
• Maintenance: EVs generally don't need as much maintenance as a combustion engine. But you'll still need to have your tyres and brake pads checked and potentially a fluid replacement. It's worth speaking to your local garage to find out how much EV maintenance might cost.
• EV pay-per-mile road charge: Starting in April 2028, the UK government is introducing Electric Vehicle Excise Duty (eVED). These charges will be implemented in addition to the existing base rates for EV cars. Under the proposals, drivers of EVs will pay 3 pence per mile, while plug-in hybrid owners will be charged 1.5 pence per mile. To see how you might pay, try our EV mileage tax calculator.

What our motor insurance expert says

"The cost of driving an electric vehicle is set to rise in April 2028 with the introduction of the new pay-per-mile road charge. It means that EV drivers will end up paying even more in addition to the standard base tax.

"For example, fully electric car drivers with an annual mileage of 7,000 miles would pay £210 more. Whereas for plug-in hybrid drivers, it's an additional cost of £105 per year. This is based on the new rates the government is introducing in April 2028.

"Despite the introduction of the charge, it's about 'half the fuel duty rate paid by drivers of petrol cars.' This is according to the government's independent forecaster, the Office for Budget Responsibility (OBR)."

Matt Crole Rees Motor General Manager & Motor Insurance Expert

What is the government doing to help the UK’s EV uptake?

Here's a quick look at what else the government is doing to improve infrastructure and support people who are thinking of switching to an EV:

Increasing the number of charging points

At the moment there are over 74,000 chargers in the UK. Last year, 20,000 were added, which is a record according to the government. There are also 24/7 helplines, contactless payment on charge points in public spaces, and up-to-date chargepoint locations. So it's clear there is some progress when it comes to charging your EV, which is great considering the ban is only five years away.

In February, the government announced that over 1,400 electric charging sockets were installed in schools and colleges in the UK since March 2024. The government has also extended the home and workplace chargepoint funding for another year. This should make charging more convenient for school staff and EV drivers.

The government said there's £200 million aside for the chargepoint rollout and £36 billion of private investment in the pipeline. So the UK could see a big increase in the number of EV chargers over the next few years.

Chargepoint grants

Alongside this, there's a variety of UK-wide grant schemes to support new EV charge points outside of homes and workplaces. You might be able to apply for a grant for a chargepoint if:

• You're a renter or own a flat
• You live in a house with on-street parking

You can also get a chargepoint and infrastructure grant for:

• Business staff and fleet car parks
• Landlords, including car parks
• Workplaces and schools (or educational institutions)

Also in England, there's funding for local councils through the Local Electric Vehicle Infrastructure (LEVI). The previous government also planned a Rapid Charging Fund (RCF) to increase the number of charging points at motorway service stations.

More recently, Department for Transport minister Heidi Alexander announced £6 billion of private investment to make charging infrastructure quicker and easier to install. She also announced that planning could be easier for charging infrastructure.

Making the switch to electric vans, wheelchair-accessible vehicles and taxis easier

As well as the improvements to charging infrastructure, the government has also announced £120 million in funding to make switching to 'cleaner' vans, wheelchair-accessible vehicles, and taxis faster and cheaper.

The plug-in grant, which is only for vans and trucks, is being extended for another year to help drivers and businesses transition to zero-emission vehicles. This means businesses and van drivers could receive a grant of up to £2,500 for a new small van. And up to £5,000 for larger vans up to 4.25 tonnes.

Taxi drivers can also get a grant for £4,000 to buy an iconic zero-emission black cab or other electric cab model.

This is part of the overall £2.3 billion fund to help industries and consumers switch to electric vehicles.

Low-emission zones

London has an ultra-low-emission zone (ULEZ). Here, the emission levels are even more strict. The ULEZ has recently been extended to cover most of the capital. In the rest of the UK, there are low-emission zones in:

• Bath
• Birmingham
• Bradford
• Bristol
• Portsmouth
• Sheffield
• Tyneside - Newcastle and Gateshead 

*Based on Confused.com's petrol prices tool April 2026

**Confused.com data January-February 2026