TL;DR A significant number of UK motorists are already reconsidering whether to switch to electric vehicles following the announcement of a pay per mile tax due in 2028. The Electric Vehicle Excise Duty will charge EV drivers per mile and applies a lower rate for plug in hybrids. Although the policy is still years away, it is already shaping behaviour, with nearly a third of drivers saying it makes them less likely to buy an EV. Current EV owners are also uncertain about long term ownership once the charge is introduced. While electric vehicles still tend to be cheaper to run than petrol or diesel cars, concerns around future taxation, upfront costs and charging access continue to slow adoption.
Chancellor Rachel Reeves’ proposed Electric Vehicle Excise Duty, known as eVED, will introduce a pay per mile charge for electric vehicles from April 2028. The policy sets a rate of 3p per mile for fully electric cars and 1.5p per mile for plug in hybrids, alongside existing vehicle tax rules. It is intended to replace falling fuel duty revenue as more drivers move away from petrol and diesel vehicles.
Although the policy is still in development, it is already affecting consumer sentiment. Research from a survey of 2,000 drivers found that 31 percent say the proposed tax makes them less likely to switch to an EV today. This shows that expectations about future running costs are already influencing current buying decisions.
Among existing electric vehicle drivers, attitudes are mixed.
- 38 percent say they will definitely keep their EV once the tax starts
- 7 percent say they are unlikely to keep it
- 55 percent are undecided
This level of uncertainty suggests that long term ownership decisions are being delayed until more detail on costs is available.
Cost impact and fairness concerns
For a driver covering around 10,000 miles a year, the proposed tax could add roughly £200 to £300 per year in extra costs. Industry groups such as the British Vehicle Rental and Leasing Association have warned that the system could hit some regions harder than others, particularly rural areas with limited public transport and lower average incomes.
EVs still cheaper to run overall
Despite concerns around new taxation, electric vehicles continue to offer lower running costs than petrol or diesel cars in many cases.
- Average annual EV charging cost is around £680
- Equivalent petrol or diesel fuel cost is around £1,660
- Estimated annual saving is around £980
Even with the proposed tax, many EV drivers are still expected to pay less overall, particularly those who charge mainly at home.
Barriers to adoption remain
Several factors continue to slow EV uptake beyond tax policy. These include higher upfront purchase prices, uneven charging infrastructure, and concerns about driving range. Over two thirds of drivers still say the purchase price of EVs is too high, while 28 percent highlight range limitations as a key concern.
As discussions around future vehicle taxation continue, many drivers are looking more closely at what they currently pay. Motorists can check their existing car tax status and compare costs here
This helps drivers understand their current Vehicle Excise Duty and how it may compare with future EV running costs as new policies are introduced.
Long term outlook
The transition to electric vehicles is still expected to continue, but the pace may be slower than previously forecast. Many drivers now expect to switch within five years, but with most households still relying on petrol cars, uncertainty around taxation and affordability is slowing the shift towards full electrification.