Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the decision to introduce a pay per mile levy on hybrid and EV drivers on their future choice of vehicle.

As announced at Budget 2025, the Government is introducing Electric Vehicle Excise Duty (eVED) from April 2028, a new mileage charge for electric and plug-in hybrid cars, recognising that electric vehicles (EVs) contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty. The taxation of motoring is a critical source of funding for public services and investment in infrastructure

PHEVs have the capacity to drive in either electric or petrol mode and will continue to pay fuel duty on miles driven in petrol mode. In recognition of this, they will be subject to a reduced eVED rate of 1.5 pence per mile upon its introduction in April 2028 – half the rate that will apply to fully electric cars

Alongside the introduction of eVED, the Government is also providing generous additional support to incentivise the use of electric vehicles, including £1.3 billion of additional funding for the Electric Car Grant (ECG), £200 million for chargepoint rollout, and increasing the Expensive Car Supplement (ECS) threshold to £50,000 for EVs

New electric car sales are still forecast to more than triple from nearly 0.5 million sales in 2025/26 to around 1.6 million by 2030/31.