Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential financial impact on long-distance commuters and early adopters of electric vehicles of the decision to apply standard rates of vehicle excise duty to electric vehicles from 2025, and to increase those rates further from 2028.

From April 2025, zero emission and hybrid cars, vans and motorcycles started to pay Vehicle Excise Duty (VED) in a similar way to petrol and diesel vehicles; the standard annual rate is £195.

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 EVs (electric vehicles) contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty.

While it is fair for EV drivers to contribute for their car usage, the government is also committed to ensuring that driving an EV is an attractive choice for consumers. Therefore, the rate of eVED for EVs will be half of the equivalent fuel duty rate paid by the average petrol/diesel driver, ensuring that it will still be cheaper to own and run an EV for the majority of EV drivers. When eVED takes effect in April 2028, an average EV driver will pay around £240 per year or £20 per month.

The Government is taking a proportionate approach to ensuring electric car drivers pay an appropriate share whilst remaining firmly committed to supporting the transitions to EVs. That is why 80% of eVED revenue from the first three years is being reinvested to extend support for EVs and the auto manufacturing industry. This builds on existing generous support, including Company Car Tax incentives.