Overview
- The government’s electric vehicle excise duty begins in April 2028 at 3p per mile for battery EVs and 1.5p for plug-in hybrids, with the OBR estimating about £255 a year for a typical BEV driver.
- The IFS says the ZEV mandate means EV sales shares cannot fall, so weaker EV demand could force manufacturers to ration petrol and diesel models and lift their prices; Vertu Motors’ chief executive predicts market turmoil and lower volumes.
- SMF’s Gideon Salutin cautions that poor design could harm EV uptake, citing New Zealand where per‑kilometre charges left EVs costlier to run than petrol and sales dropped when road pricing arrived alongside subsidy changes.
- Iceland is highlighted as a more successful model, pairing per‑kilometre charging with purchase grants, VAT and registration exemptions, charging-point support and parking perks to sustain demand.
- Operational details are still being developed, with reports pointing to annual DVLA odometer reporting and prepayment at VED renewal with top‑ups or rollovers, as the Budget also extended the Electric Car Grant to 2030 and raised the expensive car supplement threshold for BEVs to £50,000.