Electric cars have enjoyed road tax exemption — but this is changing. Here's what you need to know.
Current Situation (Until April 2025)
Zero Road Tax for Pure EVs
| Vehicle Type | Annual Road Tax |
|---|---|
| Pure electric (BEV) | £0 |
| Plug-in hybrid (PHEV) | Depends on CO2 |
| Petrol/diesel | £190+ |
Pure electric vehicles currently pay no road tax (VED).
Why the Exemption Existed
| Reason | Explanation |
|---|---|
| Incentivise EV adoption | Make EVs more attractive |
| Zero tailpipe emissions | EVs don't pollute at point of use |
| Government EV targets | Needed to hit 2030 goals |
Changes from April 2025
EVs Will Pay Road Tax
The government announced changes in Autumn 2022:
| Change | Details |
|---|---|
| Effective date | 1 April 2025 |
| New EVs | Pay standard rate |
| Existing EVs | Also now pay |
| Rate | Same as petrol/diesel |
What EVs Will Pay
| Year | First Year Rate | Standard Rate |
|---|---|---|
| From April 2025 | £10 | £190 |
| Subsequent years | — | £190 |
£10 first year is the lowest band (for zero emissions), then £190/year thereafter.
The "Expensive Car" Supplement
| Vehicle List Price | Additional Tax |
|---|---|
| Under £40,000 | None |
| Over £40,000 | £410/year extra (years 2-6) |
Many EVs cost over £40,000, so will pay:
Example: Tesla Model 3 (£45,000)
| Year | Road Tax |
|---|---|
| Currently | £0 |
| Year 1 (from April 2025) | £10 |
| Years 2-6 | £600 |
| Years 7+ | £190 |
Impact on Different Buyers
New EV Buyers (April 2025+)
| Consideration | Impact |
|---|---|
| First year tax | £10 (minimal) |
| Ongoing cost | £190-600/year |
| Still cheaper than petrol | Yes (fuel savings far outweigh) |
| Affects buying decision? | Unlikely for most |
Current EV Owners
| Situation | Impact |
|---|---|
| Registered before April 2025 | Still pay from April 2025 |
| No grandfather clause | Everyone pays |
| Annual cost | £190 (or £600 if over £40k) |
Comparison: EV vs Petrol Total Costs
Over 3 years, 10,000 miles/year:
| Cost | Petrol | Electric |
|---|---|---|
| Road tax | £570 | £570-1,810 |
| Fuel | £4,800 | £1,200 |
| Servicing | £600 | £200 |
| Total | £5,970 | £1,970-3,380 |
EVs remain significantly cheaper overall despite road tax changes.
The £40,000 Threshold Problem
Why It Matters for EVs
| Issue | Explanation |
|---|---|
| Many EVs exceed £40k | Battery costs push prices up |
| 5 years of extra tax | £410/year = £2,050 total |
| Threshold not inflation-linked | More cars affected over time |
EVs Under £40,000 (Avoiding Supplement)
| Model | Price |
|---|---|
| MG4 | £26,995 - £36,495 |
| BYD Dolphin | £25,490 - £32,990 |
| Vauxhall Corsa Electric | £29,995 - £36,995 |
| Peugeot e-208 | £30,450 - £36,700 |
| Renault Megane E-Tech | £35,995 - £39,995 |
| Cupra Born | £35,525 - £39,935 |
EVs Over £40,000 (Subject to Supplement)
| Model | Price |
|---|---|
| Tesla Model 3 | £39,990 - £54,990 |
| Tesla Model Y | £44,990 - £59,990 |
| Hyundai Ioniq 5 | £41,945 - £54,945 |
| Kia EV6 | £44,995 - £63,995 |
| BMW iX1 | £47,705 - £52,905 |
Check list price carefully — some base models sneak under £40k.
Plug-In Hybrids
Current and Future Tax
| Period | PHEV Road Tax |
|---|---|
| Currently | Based on CO2 (often £0-180) |
| From April 2025 | Based on CO2, may increase |
| Expensive car supplement | Applies if over £40k |
PHEVs don't benefit from the £10 first-year rate — only zero-emission vehicles do.
Company Car Tax (BIK) — Different System
Not Affected by VED Changes
| Tax | Change |
|---|---|
| Road tax (VED) | Increasing for EVs |
| Company car tax (BIK) | Still very low (2-5%) |
Company car tax remains a major EV advantage:
| Year | EV BIK Rate |
|---|---|
| 2024/25 | 2% |
| 2025/26 | 3% |
| 2026/27 | 4% |
| 2027/28 | 5% |
Frequently Asked Questions
"Will I get a refund for current zero-tax?"
No. There was no charge, so nothing to refund.
"Is there a grandfather clause for existing EVs?"
No. All EVs will pay from April 2025, regardless of when registered.
"Does this apply in Scotland/Wales/NI?"
Yes. VED is UK-wide.
"What about hydrogen cars?"
Same as EVs — £10 first year, then £190.
"Could the government change this again?"
Possible but unlikely. The change was announced well in advance.
Historical Context
Why the Change?
| Factor | Explanation |
|---|---|
| Lost revenue | More EVs = less VED collected |
| Fairness argument | EVs use roads too |
| Revenue sustainability | Treasury needs income |
| EV market maturity | Less incentive needed |
VED Revenue Gap
| Year | EVs on Road | Estimated Lost VED |
|---|---|---|
| 2023 | 1 million | £190 million/year |
| 2025 | 2 million | £380 million/year |
| 2030 | 10 million+ | £1.9 billion+/year |
The government couldn't sustain the exemption as EV numbers grow.
What This Means for You
If Buying Before April 2025
| Factor | Consideration |
|---|---|
| Road tax starts April 2025 | Doesn't matter when you buy |
| No benefit to delaying | Or rushing |
| Choose the right car | Tax is minor vs fuel savings |
If Buying After April 2025
| Factor | Consideration |
|---|---|
| £40k threshold | Try to stay under if close |
| First year only £10 | Minimal initial impact |
| Ongoing £190/year | Budget accordingly |
| Still cheaper than petrol | By thousands per year |
Summary
| Question | Answer |
|---|---|
| Do EVs pay road tax now? | No (until April 2025) |
| Will EVs pay road tax? | Yes, from April 2025 |
| How much? | £10 first year, then £190/year |
| Over £40k list price? | Additional £410/year for years 2-6 |
| Is EV still worthwhile? | Yes — fuel savings far exceed tax |
| Company car tax affected? | No — BIK remains very low |
The Bottom Line
From April 2025, EVs will pay road tax:
This doesn't change the EV value proposition:
The road tax exemption was always a temporary incentive. Its removal makes EVs slightly less cheap to run, but they remain significantly more economical than petrol/diesel vehicles overall.
Don't let road tax changes put you off — the savings elsewhere are much larger.