Pay-Per-Mile Road Tax for EVs: What UK Drivers Need to Know in 2026
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The UK Government confirmed in the Autumn Budget that electric vehicles will be subject to a new pay-per-mile charge from April 2028. The policy — formally known as Electric Vehicle Excise Duty (eVED) — will charge EV drivers 3p per mile, with plug-in hybrid vehicles (PHEVs) subject to a rate of 1.5p per mile.
The measure is part of a broader effort to address the structural decline in fuel duty revenue. As more drivers switch from petrol and diesel to electric vehicles — and as combustion engine cars become progressively more fuel-efficient — the Treasury's fuel duty receipts are forecast to fall substantially. The Department for Transport has noted that approximately one in five car drivers could be contributing no fuel duty at all by the end of the decade if no alternative is introduced.
eVED is the Government's response: a distance-based charge designed to ensure that EV drivers contribute to road maintenance costs as the UK vehicle parc continues to electrify. For a full overview of how eVED sits alongside the other road tax changes introduced in April 2025, see our guide to UK road tax changes for electric cars.
How Much Will Pay-Per-Mile Cost EV Drivers?
At 3p per mile, the annual eVED liability depends entirely on how far you drive. Based on the current UK average of around 7,400 miles per year, most EV drivers would pay approximately £220 annually under the new system. Drivers covering 10,000 miles annually would pay £300, and those at 15,000 miles would pay £450.
For comparison, petrol and diesel drivers currently pay approximately 5p per mile in fuel duty. At 10,000 miles, that equates to roughly £500 per year in fuel duty alone — a figure that does not diminish as EV adoption grows, but which the Treasury nonetheless flags as increasingly concentrated among a shrinking proportion of drivers.
The eVED rate for electric cars is therefore lower, on a per-mile basis, than the fuel duty burden currently carried by equivalent combustion engine drivers. However, it does represent a new cost for EV drivers who have not previously paid a mileage-based road charge.
What Has the SMMT Said?
The Society of Motor Manufacturers and Traders (SMMT) — the UK's automotive industry body — has publicly criticised the introduction of eVED, describing it as the "wrong measure" at the wrong time.
The SMMT's position centres on the risk to consumer confidence. The UK is mid-transition to zero-emission vehicles, with the Government's Zero Emission Vehicle (ZEV) mandate requiring 33% of new car sales to be zero-emission in 2026, rising to 80% by 2030 and 100% by 2035. Any policy that introduces additional costs for EV drivers risks slowing the rate of consumer switching at a point when momentum is essential.
The SMMT has consistently called for policy stability around EV ownership costs, arguing that predictable, favourable running costs are central to driving consumer confidence. Their objection to eVED is not that EVs should never contribute to road funding, but that the timing and framing of the charge risks sending the wrong signal to drivers considering making the switch.
What Does This Mean for the UK's Electric Car Targets?
The Government's ZEV mandate sets legally binding targets for EV sales, placing the obligation on manufacturers rather than consumers. However, consumer demand for electric vehicles is what ultimately enables manufacturers to meet those targets — making driver confidence a policy concern as much as an industry one.
The future of electric vehicles in the UK remains broadly positive. EV registrations have grown significantly year-on-year, and the expanding public charging network continues to reduce one of the key barriers to adoption. But the policy environment around running costs — including road tax, energy tariffs, and the trajectory of Benefit-in-Kind rates — remains a factor that prospective EV drivers weigh carefully.
eVED adds a new variable to that calculation. Its impact on demand will likely depend on how clearly the Government communicates the continued cost advantage of electric motoring relative to petrol and diesel alternatives.
What Does Pay-Per-Mile Mean for Electric Car Salary Sacrifice Drivers?
For drivers accessing an electric car through a salary sacrifice scheme, the introduction of eVED in 2028 does not change the core economics of the scheme.
Through The Electric Car Scheme, employees save 20-50% on the cost of a new electric car by making payments from their gross salary, before income tax and National Insurance are deducted. In 2025/26, the Benefit-in-Kind rate for electric vehicles is 3% — compared to up to 37% for high-emission petrol and diesel company cars. The BiK rate is confirmed through to 2029/30, rising by one percentage point per year, giving drivers clear visibility of their tax position over a typical three or four-year lease.
eVED, at 3p per mile from 2028, sits outside the salary sacrifice calculation and would be an additional cost paid directly by the driver. At average UK mileage, this adds approximately £18–25 per month — a meaningful but relatively modest figure when set against the savings available through electric car salary sacrifice.
To understand the full cost picture of EV ownership — including fuel, maintenance, tax, and salary sacrifice savings — our electric cars vs petrol cars cost comparison sets out the numbers in detail.
Frequently Asked Questions
What is eVED?
eVED stands for Electric Vehicle Excise Duty. It is a pay-per-mile road tax charge confirmed by the UK Government for electric vehicles from April 2028. The rate is 3p per mile for fully electric cars and 1.5p per mile for plug-in hybrid vehicles.
When does pay-per-mile road tax start for electric cars?
eVED is confirmed to launch in April 2028. Standard VED charges for electric vehicles — a flat annual rate — were introduced separately in April 2025. You can read more about those in our guide to UK road tax changes for 2025.
Will pay-per-mile apply to petrol and diesel cars?
No pay-per-mile charge has been confirmed for petrol and diesel vehicles. The eVED policy applies specifically to electric and plug-in hybrid cars from 2028. Combustion engine drivers continue to pay fuel duty, which amounts to approximately 5p per mile at current rates.
Does eVED affect the savings available through electric car salary sacrifice?
No. The savings available through The Electric Car Scheme — 20-50% on a new electric car, and a 3% BiK rate in 2025/26 — are unaffected by eVED. The charge applies from 2028 and is paid directly by the driver, separate from the salary sacrifice scheme itself.
Is an electric car still cheaper to run than a petrol car after eVED?
Yes, based on current figures. Petrol and diesel drivers pay approximately 5p per mile in fuel duty. eVED charges EV drivers 3p per mile. Even with eVED, electric cars retain a lower per-mile road tax burden than equivalent petrol or diesel vehicles — in addition to substantially lower fuel and maintenance costs. Use our savings calculator to compare the full cost of ownership.
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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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