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Electric automobiles will no longer be exempt from paying road tax in the UK starting April 2025, as the country moves to a “fairer” motoring tax system. The news comes straight from the chancellor's autumn statement in the Commons regarding the vehicle excise duty for EVs. With the announcement, some believe it could slow the transition to EVs.
It was clear from the start that the exemptions offered for EVs in the UK and other countries would be eliminated at some point. While those exemptions did convince some people to get an EV faster than they would have customarily switched, for some it was just an extra benefit on top of their new car.
As you may be aware, the UK will ban the sale of new cars with internal combustion engines after 2030, which is ten years earlier than the country initially announced, but will allow plug-in hybrids to be sold up until 2035 if they can travel a considerable distance in their all-electric mode.
Since the UK is a large car market in terms of volume, it should have been evident that the exemption was not permanent. After all, the country would end up missing out on road tax payments from most new vehicles sold after 2030, if not all sold after 2035 if the exemption was retained undefinitely.
The chancellor explained that car tax rates would remain lower for electric vehicles, with increases capped at one percent per year from 2025, Automotive News informs (sub. Req.). Moreover, vehicles that were registered as low-emission cars (not just EVs) that were registered as such before 2017 will pay just GBP 20 (ca. $ 23,85) a year in road tax.
Buyers of EVs that are registered as new from April 1, 2025, will pay GBP 10 (ca. $11,92) in their first year, and then move on to the standard rate in the following years.
Currently, the UK's VED stands at GBP 160 (ca. $190). It is unclear if the road tax will be increased by April 2025, but at today's rate, it is estimated that the UK's government will get approximately GBP 3 billion per year from EVs alone from 2025 to 2028.
It is worth noting that EVs will no longer be exempt from the "expensive car supplement," which will bring a GBP 310 (ca. $369) charge for the first five years of ownership that applies to all electric models priced over GBP 40,000 (ca. $47,721). With many EVs fitting that bill as well, it is clear that the UK government is set to gain quite a bit of money from the car-buying choices of its citizens.
As you may be aware, the UK will ban the sale of new cars with internal combustion engines after 2030, which is ten years earlier than the country initially announced, but will allow plug-in hybrids to be sold up until 2035 if they can travel a considerable distance in their all-electric mode.
Since the UK is a large car market in terms of volume, it should have been evident that the exemption was not permanent. After all, the country would end up missing out on road tax payments from most new vehicles sold after 2030, if not all sold after 2035 if the exemption was retained undefinitely.
The chancellor explained that car tax rates would remain lower for electric vehicles, with increases capped at one percent per year from 2025, Automotive News informs (sub. Req.). Moreover, vehicles that were registered as low-emission cars (not just EVs) that were registered as such before 2017 will pay just GBP 20 (ca. $ 23,85) a year in road tax.
Buyers of EVs that are registered as new from April 1, 2025, will pay GBP 10 (ca. $11,92) in their first year, and then move on to the standard rate in the following years.
Currently, the UK's VED stands at GBP 160 (ca. $190). It is unclear if the road tax will be increased by April 2025, but at today's rate, it is estimated that the UK's government will get approximately GBP 3 billion per year from EVs alone from 2025 to 2028.
It is worth noting that EVs will no longer be exempt from the "expensive car supplement," which will bring a GBP 310 (ca. $369) charge for the first five years of ownership that applies to all electric models priced over GBP 40,000 (ca. $47,721). With many EVs fitting that bill as well, it is clear that the UK government is set to gain quite a bit of money from the car-buying choices of its citizens.
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