‘I wish I’d never bought an EV’: Drivers’ fury at new pay-per-mile tax that forces them to report to MOT stations every year

Electric vehicle owners have reacted with dismay to another tax being slapped on their eco-friendly cars after the Chancellor announced plans to impose mileage-based electric Vehicle Excise Duty (eVED) charges from April 2028.

Rachel Reeves used her Budget to confirm the Treasury’s controversial road pricing plans in order to claw back lost fuel duty revenue as a result of drivers moving to electric vehicles (EVs), starting from April 2028.

It will be charged at a rate of 3p per mile, and 1.5p per mile for hybrid car owners. 

Government consultation papers propose that EV owners will likely have to report to an MOT testing centre every year to have their mileage read and the tax imposed – despite new cars not requiring an MOT for their first three years. 

New car owners will be offered the option of estimating their first year’s mileage in order to set their initial rate. 

Some drivers online have threatened to tamper with odometers to avoid paying the tax – which the Government says it expects.

‘The introduction of eVED may increase the likelihood of motorists choosing to clock their vehicles, or allowing the odometer to be inoperative,’ it said.

Drivers who spoke to the Mail accept that a honeymoon period of incentives to switch to electric, including low tax, was never going to last – but have nevertheless slammed the Chancellor for ‘yet another tax raid’.

James Sponder, 46, told the Mail he now regrets his EV purchase, which he made through salary sacrifice.

‘I probably wouldn’t have got the car if I knew that was going to change significantly, I don’t think it’s a very good idea,’ he said.

‘If you try to encourage everyone to move to EVs, you can’t then start taxing people, it will just switch everyone off.’

Scott Gallacher, director of Leicester-based private wealth management firm Rowley Turton, told the Mail: ‘As an EV driver, I can’t say I’m surprised. No Chancellor was ever going to give up billions in fuel duty forever, so a per-mile charge was inevitable. 

‘What is contradictory, though, is introducing this tax at the same time as pledging £1.3bn to encourage EV adoption. 

‘Personally, it won’t change how or where I drive, but it does feel like yet another tax raid on those of us who moved to electric when the Government encouraged us to do so.’

Even car industry bosses have expressed concern over the introduction of eVED – which will be paid over and above the standard annual flat rate of £195.

Matt Galvin, managing director of EV manufacturer Polestar, said: ‘We have always been clear that EV drivers should contribute their fair share to road costs. 

‘But today’s Budget sends the wrong signal by penalising the very drivers who are accelerating the transition to clean transport. If this is one of the goals then a review of fuel duty which hasn’t changed since 2011, would also be welcome.’

Other drivers, including EV expert Dr Euan McTurk, have suggested the holiday from tax was always going to end as the cars became more common.

Dr McTurk averages between 10-12,000 miles a year between his Hyundai Ioniq 5 and his rare 1990s Peugeot 106 Electrique – which would make him liable for up to £360 of eVED a year.

He lives in Dundee: its council was among the first in Britain to offer EV drivers incentives like free parking and free charging for early adopters. Those privileges have since been rescinded.

He told the Mail: ‘There’s been a lot of pushback from everyday drivers – but if you look beyond that the overall cost of running an EV, the Treasury says, is still about 6p per mile, compared to 15p per mile for a petrol car.

‘It’s still a saving overall. People weren’t expecting to have £0 VED forever. But the Government needs to make clear it’s a lower tax for many – maybe with a calculator people can use to see how much it will cost.

‘I was grateful for the £0 VED and free charging for a while but to be honest I’ve managed to make it work as taxation has come in.

‘The issue still remains with public charging – they need to find ways of bringing the cost down.’

Pay-per-mile schemes have been batted around for years as MPs have struggled to find ways to fill the £40billion fiscal black hole created by the switch to EVs and the loss of motoring taxes including fuel duty. 

Ms Reeves told Parliament yesterday: ‘All cars contribute to wear and tear on our roads, so it is only right that our motoring taxes cover EVs via a modest per mile levy, with extra support to keep EV ownership attractive.’

The OBR predicts that the introduction of eVED will ‘reduce demand for electric cars as it increases their lifetime cost’, with an estimated 440,000 fewer EV sales across the next five years.

However, the Treasury said the OBR’s calculation is incorrect and it will be closer to a 120,000 EV shortfall between now and the end of the decade.

It too is expected to be offset by a forecast 130,000 increase in electric vehicle sales due to other EV budget incentives – including an expansion of the Electric Car Grant and increasing the VED Expensive Car Supplement threshold to £50,000.

Pay-per-mile will see EV owners having to pay a so-called ‘modest’ 3p charge per mile they drive. This is on top of the £195-a-year VED rate electric car drivers now have to pay since April this year. 

Plug-in hybrid vehicles (PHEVs) – which have small batteries and are capable of covering up to 90 miles on electric-only models – will also be subject to a 1.5p per mile charge. Both rates will rise annually in line with CPI.

Daily Mail and This is Money has spoken to five EV drivers to see how it will impact their finances… 

What is pay-per-mile eVED and how will it work? 

Pay-per-mile is a road pricing system that levies a fee for each mile driven. 

It’s usage-based, so those who use the roads more pay more – and the idea is that it encourages people to use cars less and public transport more. 

The OBR states that average driver of an electric car in 2028-29 driving 8,500 miles is therefore expected to be charged £255 in eVED. This is roughly equivalent to half the rate of fuel duty tax paid per mile by drivers of petrol and diesel vehicles.

The revenue will go towards maintaining the UK’s roads and infrastructure in the same way fuel duty does. 

The OBR says eVED introduction will ‘offset around one-quarter of the 0.6 per cent of GDP in revenue set to be lost from fuel duty by 2050 due to the transition to electric vehicles’.

Instead of bringing in an invasive system where black boxes are fitted that track vehicle mileage, the Treasury has confirmed that EV drivers will ‘self-report’ their mileage and pay a fee based on that prediction. 

The eVED charge will be paid via the DLVA and – based on a driver’s estimation – can either be a full lump sum payment or spread across installments. The mileage will then be checked at the annual MOT test.

With new models not requiring an MOT until they’re three years old, it means owners of EVs will need to visit a test centre annually over the first 36 months to have their mileage audited.

It means that while their car won’t be MOT tested, owners of EVs under three years old will still need to have an official ‘mileage check’ carried out by a test centre. 

While this will incur a charge from accredited garages, the Government will cover the cost of the mileage check – though hasn’t liaised with groups like the Independent Garage Association regarding what these costs amount to.

However, this system could be replaced by connected car technology within the vehicle itself and linked to manufacturers, which opens an entirely new can of worms in terms of privacy issues.

If an EV driver overestimated their mileage at the point of payment, the remaining money will be carried over as credit to cover next year’s eVED charge. 

However, if they drive further than originally estimated, they would be required to top up their payment to the Government.

Howard Cox, Founder of FairFuelUK.com, warned the introduction of the policy will likely open the door for pay-per-mile charges for all cars irrespective of their fuel type.

‘Rachel Reeves’s 3p Pay per mile on EVs is I fear the thin end of the wedge to make all vehicles, whatever their type of fuel, pay tax as they drive,’ he said.

‘Whilst Fuel Duty and VAT continues to deliver billions to the Exchequer, both types of taxation cannot work alongside each other. It’s time Government listens to and consults drivers as to developing a long term road user tax plan that’s fair to UK’s 37 million drivers and the economy.’

Car giant Ford said the measures introduced in the Budget ‘sends a confusing message’ to drivers at a time when the EV transition is stumbling: ‘Extra investment in charging and the Electric Car Grant is positive, but it cannot offset the impact of a poorly timed pay per mile charge on EVs and hybrids. 

‘Against a hugely challenging market, and compliance targets drifting out of reach, this is the wrong tax at the wrong time.’

Edmund King, AA president, says the Budget has ‘put drivers at a fork in the road’ and that while drivers ‘fully understand’ the need for raising money for highway upkeep and pothole repairs, this shouldn’t be at a detriment to the EV transition.

He says: ‘Getting the timing right is crucial, and there will be concerns that should pay-per-mile for EVs be introduced too soon it may put slow down the switch to electric cars.’

Simon Williams, head of policy at the RAC, says the Government ‘expanding the Electric Car Grant’ shows it is fully aware that pay-per-mile will ‘slow down the transition to electric vehicles’. 

Steve Gooding, director of the RAC Foundation, commented: ‘By our calculations a 3p per mile charge for EVs is still likely to leave a gap from the annual revenue Chancellors have come to bank on from fuel duty, which means its unsurprising that in parallel the Treasury has looked to increasing the level of fuel duty as a way to cover a shortfall that could otherwise be as much as £2billion per annum by the end of the decade.’ 

How will it impact EV owners?

This is Money and Daily Mail asked five electric car owners how the pay-per-mile charge will impact their ownership and whether they’d go electric again under these conditions…

Gill Nowell – would still pick an EV because charging at home saves her so much money

Cheshire business founder, Gill Nowell, 52, tell us: ‘I’ve driven EVs through work since 2012, and I’ve had an electric car since 2019. 

‘Even with pay-per-mile, I’d still choose electric. If I end up paying around £250 a year through pay-per-mile, I’m still saving about £750 in running costs by charging at home. It costs me less than £5 to fully charge at home overnight.

‘But the real issue is fairness. According to EVA England, half of drivers without driveways already find their EVs more expensive to run because public charging costs more.

‘Let’s not penalise EV drivers now, especially when, like myself, over 95 per cent of us would never go back to the ICE (internal combustion engine) age.’

Jacob Eden – Tesla owner who uses his EV for business 

Would you have bought an EV if they knew this was coming?

Jacob, 32, who works in Telecommunications and lives in Southend-on-Sea, answers: ‘Probably not, I understand that EV drivers must also pay their way, and rightly so, but this is too soon. It’s mixed messaging and confusing for the consumer.’

If you were buying an EV with pay-per-mile in place would you still go ahead?

‘I think we still would, because I far prefer my EV to combustion, but it would certainly make me think twice. And that means there are a lot of people out there who would hesitate and then potentially not switch.’

How much extra will it cost you?

‘I’d be able to expense the miles for business, so that would be felt by the employer. However, it would certainly add more to our home energy bill at a time when bills are already a hefty chunk of our outgoings.’

Do you think pay-per-mile is fair? 

‘It’s fair if it’s applied to all vehicles, not just EVs. What would be fair is unfreeze the fuel duty and bring in money that way and then potentially look at pay per mile for all vehicle types.’

How will it change your EV ownership?

‘My EV is through my business so there’s no real change for me.’

Will you still save by owning an EV or will savings be swallowed up by pay-per-mile?

‘Not entirely and the running costs are still far lower. We really love our EV and hope more people get the right signals to help them make the switch.’

Marvin Samuels – two EV household who uses his EV for his commute      

If you were buying an EV with pay-per-mile in place would you still go ahead?

Marvin Samuels, a 50-year-old Test and Release Manager from Chester, answers: ‘If I was planning to buy an EV as the potential pay-per-mile plans were announced I would still buy an EV.’

Do you think it’s fair? 

‘If the revenue collected goes directly to maintaining UK roads, then I think it is mostly fair, although those living in rural areas, a long distance from their place of work, or that need to travel for their job, it could become unsustainable for those individuals.’

Will you still save by owning an EV or will savings be swallowed up by pay-per-mile?

‘Having calculated the potential additional costs based on my regular commute and additional trips for work, and compared them to the cost of running an ICE vehicle, financially it would still be beneficial to me and my family to own an EV. Personally, the reduced running costs are a ‘benefit of’ rather than a ‘reason to’ switch to an EV.

‘We currently have two EVs and a petrol car; the petrol car spends most of its time in the garage and is used only occasionally. Paying for petrol for it feels excessive these days and running two EVs has proved more cost effective for us.’

Gary Comerford – EV driver who will stick with his electric car but thinks the Government should wait

Is pay-per-mile a good idea?

Gary Comerford, a 58-year-old business consultant from Reading, says: ‘The timing on this is pretty poor. EVs make up around five per cent of the car parc in the UK and the Government is committed (through the ZEV Mandate) to increase that by 2030. 

‘Adding a financial disincentive – soon after adding a financial incentive in the form of the new car grant, and a disincentive in the form of adding VED to electric cars – seems counterintuitive.

‘Wait until EVs form a larger proportion of the overall car parc then implement this. It will be far better received.’

How will it change your EV ownership?

‘I will, perhaps, consider the financial implications of taking a journey by car in favour of not taking this journey if it wasn’t a necessary trip. 3p/ mile is not a great deal. But £300 per year can add up if you don’t watch those miles.’

Will you still save by owning an EV or will savings be swallowed up?

‘In my case this will still leave me financially better off than owning and running an electric vehicle. The savings will be reduced per year but not enough to make a difference to my use case for owning one.’

Doug Palmer – long distance EV driver who’s current EV has covered 293,000 miles

Would you have bought an EV if you knew this was coming?

‘Yes.’

If you were buying an EV with pay-per-mile in place would you still go ahead?

‘Yes.’

How much extra will it cost you?

‘Pay-per-mile will cost me in excess of £600 per annum.’

Do you think it’s fair?

‘No I don’t think it fair. It is penalising EV owners, when we need to be encouraging more people to switch. There is no equivalent penalty for high mileage ICE vehicle owners.

‘If they are going to introduce this, they need to cap it at say £300 per annum. For cars and light commercial vehicles, until we reach 50-plus per cent of vehicles being BEV. Then review.’

Will you still save by owning an EV or will savings be swallowed up by pay-per-mile?

‘It won’t change my EV ownership as I travel whenever or wherever I want to. I will still save over ICE car ownership due to very low maintenance and free charging. But I will have to put money aside, especially if they charge for the mileage I cover in Europe as well as my UK mileage.’

Doug asks if pay-per-mile will replace the recent VED changes?

‘My car is now £20 per annum. I feel some EV car and van owners have been unfairly penalised, while there are second-hand diesel cars that still pay £0 to £30! How can that be right?!’

How much will pay-per-mile cost EV drivers per year?

EV owners typically cover higher annual mileage than drivers of petrol cars, recent analysis has shown. Only motorists with diesel models travel further than those with EVs.

In 2024, owners of electric cars under three years old drove an average of 10,054 miles, a study by the RAC Foundation calculated.

Petrol models travelled only 7,585 miles while diesel cars just surpassed EVs at 10,728 miles.

At a 3p-a-mile charge, this would mean the typical EV owner would need to cough up £301.62 per annum in eVED.

For PHEV drivers, this would be £105.81. 

To put the cost into perspective, EV drivers would be looking at a charge of just over £12 to cover a trip from London to Edinburgh – PHEV drivers £6.

Driving 102 miles from Cambridge to Oxford would cost £3 (£1.50 for PHEVs), while the 73-mile journey from Liverpool to Leeds will be £2 (£1 for PHEVs).

And yet its still expected that EV owners will save money despite the pay-per-mile taxation, with the Energy and Climate Intelligence Unit think tank estimating that EVs would still be ‘£1,000 cheaper to run per year than petrol cars’.

This is based on the overall running costs of the 10 best-selling EVs last year, calculated on the premise that 80 per cent of charging is carried out at home (where it is cheapest – and quite significantly) and 20 per cent using the public network. 

Is pay-per-mile taxation fair?  

Ministers are framing road pricing as a measure of fairness because petrol car drivers currently pay £600 a year in fuel duty. 

EV drivers on the other hand have had years without having to pay fuel duty, and until April they were also exempt from paying VED.

It should also be acknowledged that MPs were told road pricing was fair following a December 2020 inquiry into the matter. It was only because the taxation was seen as too politically toxic by the previous administration that the recommendations to bring it in were shunned.

The committee concluded that road pricing ‘has always been the most effective way to tackle road congestion and pollution’ – and would fill the Treasury’s £40billion-a-year tax hole from fuel duty.

There have been recent calls for road pricing to be brought in – it’s not that Labour has just pulled it out of thin air. 

In a letter to the Chancellor last September, Campaign for Better Transport (CBT) director of policy and campaigns Silviya Barrett issued a plea to Ms Reeves to bring in road pricing, saying EV drivers should ‘fairly contribute towards vehicle taxation’, calling for a ‘simple charge’ based on ‘regular odometer readings’.

Drivers living in remote areas will be the hardest hit because of their limited access to public transport and reliance on cars.

In 2021, people in rural areas (villages, hamlets, and isolated dwellings) drove an average of 6,449 miles, while those in urban conurbations averaged 3,661 miles, data from the National Travel Survey found.

Say an EV driver was therefore covering 6,449 miles in the countryside they would have to pay £193.47 in pay-per-mile charges. An EV driver in urban locations driving 3,661 miles would pay £109.83.

Pay-per-mile will also exacerbate the EV driveway ownership imbalance in Britain – 90 per cent of electric car keepers having a driveway at home and access to cheaper charging prices.

Some recent studies have found that half of drivers would support pay-per-mile taxation.

Leading car sales platform Carwow surveyed 1,014 drivers, with half supporting switching away from VED to road pricing because they believe it is a fairer system for all fuel types.

Snap polling by YouGov took the temperature of the nation on the day pay-per-mile taxation was leaked and found that 43 per cent of Britons either ‘strongly support’ or ‘somewhat support’ the idea, while 34 per cent either ‘somewhat oppose’ or ‘strongly oppose’ it. Some 23 per cent ‘don’t know’.

However, a survey of 4,386 in-market car buyers surveyed by new car buying platform What Car? this week found that 52 per cent of people would be deterred from buying an electric vehicle (EV) if a pay-per-mile tax is introduced in the Budget and only 20 per cent thought the new tax would be a good idea.

Worst still, more than a third of respondents who were planning to buy an electric car said they would reconsider if a pay-per-mile tax on EVs was introduced.

According to the latest AA Recharge Report for September, the average cost per mile to charge an EV using a domestic tariff is 5.88p per mile.

However, for those without off-road parking facilities, the cheapest option – using a public slow charger offering speeds of up to 8kW – is 11.3p per mile, almost double that of plugging in at home.

EV owners having to use ‘fast chargers’ (9kW to 49kW) pay 13.79p – more than it currently costs to run a petrol (11.82p per mile) or diesel car (10.18p) – and those using ultra-rapid chargers (150kW-plus) are paying 17.63p. This is three times the cost of charging domestically.

Will EV drivers be charged by the mile on holiday?

The government has ruled out charging tax based on when or where people drive in a move to ‘protect motorists’ privacy’, the Treasury says. 

This means mileage driven overseas by UK registered cars will fall into scope of eVED – as with fuel duty – which does not vary on basis of where a car is driven.

‘Since the proportion of UK registered cars driving abroad each year is a small proportion of total cars, it is proportionate to prioritise privacy and simplicity over a system of checks to deduct non-UK mileage,’ the consultation document states. 

It means the 3p per mile levies will apply when Britons take their cars on holiday and drive on foreign roads, meaning motorists visiting France would pay the new tax on top of ‘péage’ tolls, which exist on French motorways.

This means EV owners will effectively be taxed twice. 

On average a 1,530-mile trip from Calais to Nice would cost an extra £45.90.

This rule is likely to face huge objection from motoring groups, who state that taxing EV owners for driving their green cars outside of the UK is ‘unfair and a huge flaw’.

Edmund King, said he does not see ‘any practical way around’ not charging EV owners by the mile overseas: ‘It would be pretty bureaucratic to have to check your mileage at Dover and have it stamped on some kind of certificate to say you’re leaving the country for two weeks.

‘There are already concerns about the extra checks at the borders, so I think it would be a nightmare. It seems EV drivers would have to pay double taxation.’

What’s halted pay-per-mile tax from being introduced before now? 

Pay-per-mile charges will be calculated based on self-reported mileage estimated by drivers.

If less miles are covered than estimated, the money surplus will roll over to the next year. However, if the EV owner exceeds their quoted mileage, they will need to pay the additional amount. 

When and how they provide this information to the Government remains unknown for now. 

However, there are some examples of road pricing already being in place across the globe – notably in New Zealand.

Drivers there pay a road user charge (RUC) – every vehicle needs a ‘distance licence’. 

Motorists pre-pay for the distance they’re going to travel, in units of 1,000km, and there are different rates for different vehicle types. 

Battery electric vehicles, plug-in hybrid vehicles and hybrid vehicles all pay a charge as well as fuel cars; these range from $76 per 1,000km (£36) for BEVs down to $38 per 1,000km for plug-in hybrid petrol cars (£18). 

It is most likely that Britain would follow a similar system to avoid the biggest hurdle that’s prevent road pricing’s introduction before now.

Many have proposed for mileage to be monitored by black boxes fitted to every car to accurately determine how to charge motorists by the mile.

However, this has proved immensely unpopular amid concerns of driver’s being tracked and monitored, potentially resulting in privacy issues as well as increasing opportunity to fine motorists for offences – such as speeding – that the black box telematic devices could identify.