Proposed pay‑per‑mile tax for electric vehicles raises concerns
The Chancellor is expected to outline plans in the upcoming Budget to introduce a mileage‑based tax for electric vehicles (EVs) from 2028. The measure is being considered as fuel duty revenues decline with more drivers moving away from petrol and diesel.
If introduced, EV drivers would pay around 3p per mile, with hybrid vehicles charged at a slightly lower rate. The proposal has not yet been confirmed and would require parliamentary approval before implementation.
Rising costs for electric drivers
Industry figures point out that electric drivers have already faced a series of cost increases in recent years, including higher insurance premiums, the introduction of Vehicle Excise Duty (VED), and rising home charging costs.
Motoring analyst John Wilmot, founder of LeaseLoco, said the proposed tax risks undermining one of the main incentives for switching to electric.
“One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay‑per‑mile tax risks eliminating that advantage,” he said.
“It’s almost sending mixed messages. We want people to switch to electric cars but they’re dealing with limited charging infrastructure and other rising costs which can leave them questioning whether it’s even worth it.”
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Net zero implications
Wilmot warned that the proposal could slow progress towards the government’s net zero goals.
“Lower running costs were a huge part of the incentive for going electric. Taking that away risks stalling the momentum we have built by giving people confidence in electric vehicles,” he said.
He added that many drivers are already expressing interest in electric options, but uncertainty over future costs may cause hesitation.
“Drivers want clarity before committing to making the switch to electric and it’s hard to have confidence when the rules and the costs keep changing.”
What it means locally
South Wales has seen a steady rise in EV ownership, supported by council‑backed charging points and private investment. Campaigners say any policy that reduces incentives could affect uptake in the region, where charging infrastructure is still developing.
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