Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential implications for her policies of the findings of the Office for Budget Responsibility’s Economic Financial Outlook on the potential impact of the new pay-per-mile tax on electric vehicle sales.

As announced at Budget 2025, the Government is introducing Electric Vehicle Excise Duty (eVED) from April 2028. The rate of eVED for EVs will be half of the equivalent fuel duty rate paid by the average petrol/diesel driver, ensuring that EVs are cheaper to own and run for the majority of EV drivers.

As set out by the OBR, the estimated net impact of eVED and other Budget measures, including the ECG and ECS, is 120,000 fewer new EV sales across the forecast period. This is against a baseline which assumes EV sales more than triple from 2025-26 levels by 2030-31, which means the net impact of eVED represents only 2% of total new EV sales in the period.

The Government has set out expected impacts from eVED and other Budget measures in the Budget 2025 Policy Costings document at GOV.UK: https://assets.publishing.service.gov.uk/media/692872fd2a37784b16ecf676/Budget_2025-Policy_Costings.pdf