Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the EV mileage charge on the (a) rental and (b) leasing motor vehicle sector, including the implications for (i) fleet turnover and (ii) the supply of nearly-new EVs to the second-hand market.

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 contribute to congestion and wear and tear on the roads but pay no equivalent to fuel duty.

The Government has set out the expected impacts, including Exchequer impacts and behavioural changes, from eVED and other Budget measures in the Budget 2025 Policy Costings document at GOV.UK, which can be found here: https://www.gov.uk/government/publications/supporting-documents-for-budget-2025

The rate of eVED paid by electric vehicle drivers will be half the 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. The Government is also providing generous additional support to incentivise the use of EVs.

The Government will continue to engage with impacted sectors and welcomes views on the design and implementation of eVED through the associated consultation.