The Road Ahead: Understanding the New Pay-Per-Mile Charges for Electric Vehicles

A revolutionary change is on the horizon for electric vehicle (EV) and plug-in hybrid drivers in the UK, as the government announces a new pay-per-mile road charge set to take effect in April 2028. These charges will be 3p per mile for electric car owners and 1.5p per mile for plug-in hybrids, with adjustments for inflation each following year. This initiative coincides with the UK’s goal to ban new petrol and diesel car sales by 2030, pushing all new vehicles towards electric or hybrid technologies.

The impact of this new charge is expected to be significant, generating an estimated £1.1 billion in revenue for the financial year 2028-29, increasing to £1.9 billion by 2030-31. This fee will be incorporated into the existing Vehicle Excise Duty system, with annual mileage checks typically conducted during an MOT.

In addition, prior changes have initiated road taxes for EVs starting April 2025, where newly registered electric vehicles will start at £10 for the first year, rising to a standard rate of £195 thereafter. Vehicles over £40,000 will incur a “luxury car tax” of £425 annually starting April 2025, escalating to £50,000 later. Noteworthy, drivers of electric vehicles in London will also face a congestion charge by 2026.

These measures are a key part of the UK’s commitment to achieve net zero emissions by 2050, aiming to tackle the quarter of greenhouse gas emissions currently attributed to the transport sector. Recent trends show a surge in new electric car sales, rising from 29,800 registrations in October 2024 to 36,800 in 2025, making up 25% of new registrations. The government envisages increasing this percentage to 80% by 2030.

Increasingly, businesses are purchasing electric cars, accounting for 73% of new registrations, while the second-hand market is also expanding. Current estimations show over 1.7 million fully electric cars on UK roads, comprising about 5% of the total number of vehicles.

Financial incentives like the Electric Car Grant—providing up to £3,750 for eligible models—reflect an effort to support EV sales and contribute to economic growth. While there are concerns about the upfront costs of electric vehicles, leasing options are growing, with nearly 680,800 EVs currently leased.

Despite the lower running costs generally associated with electric vehicles, particularly when charging at home, the costs can vary significantly based on charging location and type. The government plans to contribute £200 million to accelerate the rollout of charging infrastructure, emphasizing the need for adequate availability beyond urban areas.

Finally, while the range of electric vehicles has improved and public charging stations have increased to almost 87,000 across 44,000 locations, gaps in availability—especially outside London—must still be addressed to meet the increasing demand for electric vehicles.