A new tax on electric vehicles (EVs) could discourage many people in the United Kingdom from buying an electric car, according to a report from AutoTrader, a top car selling website. The study says the increased tax could make people take longer to stop using petrol and diesel cars, even though the government wants more people to use best cars.
Under plans announced by government in the fall Budget 2025, drivers of EVs will face a new mileage‑based tax from April 2028. This charge, called electric Vehicle Excise Duty (eVED), would mean that electric car owners have to pay about 3 pence per mile they drive. Plug‑in hybrid vehicle owners will pay about 1.5 pence per mile. The tax is designed to replace lost income from fuel duty, which falls as drivers move away from petrol and diesel.
The eVED system will be paid with the current Vehicle Excise Duty (VED), or road tax, and will require drivers to estimate how many miles they expect to drive in a year. They will pay for that mileage in advance, and any differences will be handled later. No tracking devices will be needed in cars.
AutoTrader’s report warns that this new tax could have a big effect on people’s interest in electric cars. The research found that almost half of EV buyers may think before buying an electric vehicle because of the extra running cost the tax would include. Many buyers say affordability remains the main issue when choosing a car, and adding mileage charges could make EVs less attractive as compared to petrol or diesel cars.
AutoTrader’s chief executive said the tax plans don’t match the government’s goal of getting more people to buy electric cars. AutoTrader also said the tax rules are not clear and could slow down the growth of the electric car market..
The AutoTrader report also showed that interest in electric cars varies by income, age, and location. Families with lower incomes were less likely to consider an EV. Younger drivers and people in cities were more willing to buy EVs, while older drivers and people in rural areas expressed greater concern about running costs and charging availability.
Some industry experts and government advisers have also raised concerns about the proposed mileage‑based tax. The Office for Budget Responsibility (OBR) has warned that the new tax could lead to hundreds of thousands fewer EV sales than expected over the next several years. In one estimate, the tax could reduce electric car sales by about 440,000 vehicles between 2028 and 2031.
In response, the government says the mileage tax is necessary to help fund road maintenance and replace lost fuel duty income as more people switch to EVs. The tax is set at a rate lower than the traditional fuel duty about half the rate a petrol or diesel driver would pay per mile in fuel costs.
Supporters of the tax say it will help ensure that all drivers contribute fairly to road funding, no matter what type of vehicle they use. The government also recently extended grants to make initial cost lower for eligible electric cars priced under a certain amount, offering discounts of up to £3,750 to eligible buyers.
people are not agree say that introducing new charges may impact badly to drivers and could create uncertainty at a time when the UK is trying to cut emissions and meet climate goals. They argue that adding running costs could make older petrol and diesel cars seem more financially attractive in the short term.
The mileage‑based EV tax will not begin until April 2028, giving drivers and the industry time to adjust. Public consultations on the details of the plan are already started, and stakeholders are being asked for feedback before final decision.