The first thing to say is that switching to electric was, and still is, the smart choice.  The Government confirms “the transition to EVs will improve air quality, [they are] firmly committed to supporting the transition to EVs by making electric cars accessible for everyone. This is key to meeting the UK’s Net Zero Goals and will drive growth and productivity across the UK.” 

The introduction of eVED, or pay per mile, in April 2028 is designed to counteract falling revenues from petrol and diesel fuel duty. It will not make electric cars more expensive to run than petrol/diesel cars – in fact the rate proposed is half the amount of duty that users of petrol and diesel pay.

Right now, if you are paying less than 45p/kWh for your electricity, your electric car will be cheaper to fuel than a petrol car. Even with the eVED of 3p per mile, your electric car will be cheaper to fuel than petrol if you are paying less than 33p/kWh. The numbers for diesel are 39p/kWh or 27p/kWh with eVED. These figures assume petrol/diesel at today’s prices. When looking at how much your electricity is costing (and how much you are saving by driving electric), it’s worth also noting that the budget announced measures that will reduce the cost of electricity in our homes from April 2026.

Lost in the pay-per-mile media noise is that fuel duty on petrol/diesel will gradually increase (by 5p/litre) starting in September 2026. This will make electric cars an even more attractive option.  It is also good to hear that eVED will go directly to the upkeep of UK roads which is not the case for fuel duty collected on petrol and diesel.

If you would like to know more about e-VED and other budget measures – read on!

How will eVED work?

What we know so far is that it will not be introduced before 1 April 2028 and that it will be applied to electric cars and plug-in hybrids. It will be payable in addition to standard road tax.

What we don’t know:

1. whether it will be paid annually in arrears based on actual miles driven or in advance with drivers estimating their mileage for the next year when purchasing their road tax;
2. if based on estimates (which seems to be the Government’s preference), how settling up (or receiving a credit) at the end of a year will work and what happens when a car is sold;
3. how actual mileage will be read – the MOT has been identified as an obvious point with the Government consulting on the introduction of an annual mini-MOT for cars that are not yet 3 years old. Other options include being able to submit mileage directly from the car to DVLA via an installed app – all electric cars can communicate non-personalised car-specific data to manufacturers and maybe this can be extended to DVLA too;
4. whether it will actually start in 2028 given how much work needs to be done for implementation!

The consultation will remain open until 18 March 2026.  We have already submitted our response.

Other measures introduced in this budget which affect owners of electric cars include:

• An additional £100 million investment in EV charging infrastructure, including funding to support the installation of home and workplace chargepoints.
• A consultation on permitted development rights for cross‑pavement EV charging, which will make it quicker and cheaper for households without driveways to charge from home.
• A review of the cost of public EV charging, looking at the impact of energy prices, wider cost contributors, and options for lowering these costs for consumers. The review will start in Q1 2026 and report by Q3 2026.

EV Experts’ thoughts

In a nutshell, driving electric is still the smart choice and a no brainer if you can charge at home – even with eVED – nothing has changed that position.  It is bad news for plug-in hybrid owners who face higher duties after 2028 having to pay both eVED (albeit at a reduced rate) and duty on petrol/diesel. And it’s time for petrol/diesel users to think about making the switch before the hike in their fuel costs from September.

Pay per mile for EVs was inevitable although announcing it now feels premature and unhelpful for the transition to EVs. We believe it was announced to detract from the decision to unfreeze fuel duty for petrol/diesel and looking at media coverage, it has been successful! If in any way you feel able to inform the mis-informed, please don’t hold back!

Cutting red tape to enable those without driveways to put channels across pavements and charge their cars from home is long overdue and we are glad to see it along with continued investment in infrastructure.

The cost of public charging needs some form of regulation because we are already seeing examples of unfair profiteering and a review will hopefully highlight unscrupulous players. Ultimately more EV adoption and public charging will bring prices down for consumers as expensive units will be bypassed for cheaper solutions, in the same way that more expensive petrol stations have empty forecourts.