Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment has she made of the potential financial impact of the proposed pay-per-mile charge for electric vehicles for those with hybrid vehicles, who also pay fuel duty.

As announced at Budget 2025, the Government is introducing Electric Vehicle Excise Duty (eVED), 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.

An average EV driving 8,000 miles per year will pay £240, or £20 a month in eVED (and no fuel duty), with a PHEV paying £120 in eVED (and fuel duty on petrol/diesel used). In contrast, an average petrol/diesel car driving the same distance will pay around £480 in fuel duty.