EV Pay Per Mile: What Road Pricing Could Mean for Rural and Regional Drivers
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As the UK continues its shift towards electric vehicles, attention is increasingly turning to how the government plans to replace the revenue currently generated by fuel duty. With EVs exempt from fuel tax by nature, a pay-per-mile road pricing scheme has been proposed as a long-term solution. A 3p per mile charge for electric cars is expected to come into effect in April 2028.
New analysis of government data – from the 2024 National Travel Survey – carried out by The Electric Car Scheme sheds light on how this charge could affect drivers differently depending on where they live. The findings highlight a clear regional and rural-urban divide, and raise important questions about how future transport policy can support an equitable EV transition across the whole of the UK.
The Regional Picture: Who Pays Most?
Under the proposed 3p per mile charge, the estimated annual cost varies considerably by region. Drivers in the South West face the highest projected annual cost at £110.25, reflecting the region's longer average journey distances and relative lack of public transport alternatives. The East Midlands (£105.09) and East of England (£104.55) also rank among the most affected.
By contrast, London drivers would pay an average of just £33.09 per year – a reflection of shorter average journeys and far greater access to public transport options such as the Underground, buses, and rail.
| Region | Estimated Annual Cost (3p/mile) |
|---|---|
| South West | £110.25 |
| East Midlands | £105.09 |
| East of England | £104.55 |
| South East | £98.85 |
| Yorkshire and the Humber | £98.82 |
| West Midlands | £97.14 |
| North West | £83.79 |
| North East | £82.20 |
| London | £33.09 |
Even in regions with relatively lower costs – such as the North East (£82.20) and North West (£83.79) – drivers would still face annual bills more than double those of their counterparts in the capital.
Urban vs Rural: A More Pronounced Gap
The regional variation tells one part of the story. The urban-rural divide reveals another. Analysis based on ONS area classifications shows that drivers in smaller rural areas closer to major towns and cities would face the highest average annual cost at £156.51, compared to £76.02 for urban drivers in similar proximity to city centres.
| Location Type | Estimated Annual Cost (3p/mile) |
|---|---|
| Smaller Rural (nearer to major town/city) | £156.51 |
| Smaller Rural (further from major town/city) | £143.01 |
| Larger Rural (further from major town/city) | £140.13 |
| Larger Rural (nearer to major town/city) | £128.37 |
| Urban (further from major town/city) | £96.69 |
| Urban (nearer to major town/city) | £76.02 |
This disparity is largely a function of necessity. Rural communities typically have fewer public transport alternatives and longer distances to travel for work, shopping, healthcare, and other essential activities. For many rural drivers, a car is not a convenience – it is a requirement.
The Bigger Picture: Why EVs Still Make Sense
It is important to view these findings in context. Even with a pay-per-mile charge factored in, electric cars remain significantly cheaper to run than their petrol or diesel equivalents. Fuel costs for petrol drivers are substantially higher, and EVs incur approximately half the servicing and maintenance expenses of internal combustion engine vehicles.
The disadvantages of electric cars are also diminishing rapidly, with improved range, an expanding charging network, and more affordable purchase routes all making the switch to electric more accessible. As of July 2024, the UK had over 66,000 public charge points across more than 34,000 locations – a 46% year-on-year increase.
Thom Groot, CEO of The Electric Car Scheme, put it clearly: "Even when this tax comes in, the major savings and environmental benefits of going electric remain firmly in place. Electric vehicles will continue to be the most practical and future-proof choice for UK drivers."
The analysis also serves as a timely reminder that financial incentives – not penalties – are the most effective way to accelerate EV adoption. Schemes like electric car salary sacrifice remain one of the most powerful tools available to both employers and employees looking to make the switch.
Salary Sacrifice: The Incentive That Works
For employees and employers alike, an electric car salary sacrifice scheme continues to represent the most cost-effective route into a new electric vehicle. Through The Electric Car Scheme, employees can save 20–50% on a new EV by making payments from their gross salary before tax and National Insurance are deducted. With the Benefit-in-Kind (BiK) rate for electric cars currently set at just 3% for 2025/26 – compared to up to 37% for high-emission petrol vehicles – the tax advantages remain compelling.
To understand how much you could save, use our salary sacrifice calculator to compare your current motoring costs with leasing an EV through the scheme.
For employees without home charging access, The Charge Scheme provides an additional layer of savings – enabling salary sacrifice on EV charging costs whether at home, at work, or on the public network, saving a further 20–50% on charging. This is particularly relevant for drivers in areas where charging without a driveway may otherwise present a barrier.
Designing Policy for a Fair Transition
The data underlines the importance of ensuring that road pricing policy is designed with regional and rural drivers in mind. A flat rate per mile does not account for the structural differences in how people across the UK use their cars, nor for the limited alternatives available to many outside of major cities.
As Thom Groot noted: "What we have found is that to get more people into EVs, we need financial incentives, such as the very successful salary sacrifice scheme, and not penalties. The data clearly shows that rural communities and regions outside London will bear the brunt of these costs due to longer necessary journeys and limited transport alternatives."
The UK's future of electric vehicles depends not just on the cars themselves, but on the policies that support drivers in making the switch – regardless of where they live or how far they travel. Understanding both the costs of running an electric car and the support available through schemes like salary sacrifice will be central to that transition.
Find Out How Much You Could Save
Whether you're an employer looking to offer a competitive employee benefit or an employee considering making the switch to electric, The Electric Car Scheme makes it straightforward to access a new EV at a significantly reduced cost.
Book a demo to find out how the scheme works for employers, or get an instant quote to see your personalised savings as an employee.
Methodology: The Electric Car Scheme analysed government data from the 2024 National Travel Survey to estimate annual road pricing costs by region and area classification under a proposed 3p per mile charge.
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Last updated: 18.02.26
Our pricing is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; 10,000 miles pa, 36 months, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme's terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The above prices were calculated using a flat payment profile. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
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