Overview
- From April 2028, battery-electric cars will be charged 3p per mile and plug-in hybrids 1.5p per mile, with rates uprated annually by CPI and paid alongside vehicle excise duty.
- The Office for Budget Responsibility forecasts the levy will raise about £1.1bn in 2028–29, rising to £1.9bn by 2030–31, and expects roughly 440,000 fewer EV sales over the forecast period, partly offset by incentives.
- An average EV driver covering 8,500 miles would pay about £255 in 2028–29 under the new system.
- The scheme will cover cars and PHEVs at launch but not vans, buses, motorcycles, coaches or HGVs, and the government will consult on how the charge is administered.
- Alongside the levy, the Budget expands EV support with £1.3bn for the Electric Car Grant, £200m for chargers, raises the EV expensive car supplement threshold to £50,000, and extends the fuel duty freeze short term before scheduled increases from September 2026.