Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential impact of Electric Vehicle Excise Duty on the level of demand for electric and plug-in hybrid vehicles, including for those motorists for whom the upfront cost of switching to an electric vehicle remains a significant barrier.

As announced at Budget 2025, Electric Vehicle Excise Duty (eVED) will be introduced from April 2028. Electric cars will pay 3 pence per mile and plug-in hybrid electric vehicles (PHEVs) will pay a reduced rate of 1.5 pence per mile, reflecting that PHEVs will continue to pay fuel duty on the petrol or diesel they use. eVED will ensure that electric and PHEV motorists contribute their fair share for their road usage, in a similar way to drivers of petrol and diesel vehicles who pay fuel duty.

The Government also recognises that the large majority of EVs and PHEVs have in-built connectivity and will begin developing an opt-in version of eVED that could make use of these technologies to provide a quicker, easier-to-use and more flexible system for motorists.

The Government has published information on who is likely to be affected by eVED, including expected impacts on motorists, businesses and the wider economy, as part of the published Tax Information and Impact Note. (Electric Vehicle Excise Duty (eVED) - GOV.UK).