The Government has announced changes to the taxation of and subsidies for electric vehicles in the UK in its Autumn Budget, including the introduction of a new mileage-based charge on electric cars.
Set to be introduced in April 2028, the mileage-charge will be in addition to the existing vehicle excise duty (VED). In 2028-2029, the charge will equal £0.03 per mile for battery electric cars and £0.015 per mile for plug-in hybrid cars, with the rate increasing annually with CPI.
The average driver of a battery electric car in 2028-2029 driving 8,500 miles will be expected to be charged £255 in this year, which is roughly equivalent to half the rate of fuel duty tax paid per mile by drivers of petrol and diesel vehicles.
The Government also announced a set of measures designed to increase the incentive to purchase EVs in the UK, including an increase to the expensive cars supplement (ECS) threshold for battery electric cars, from £40,000 to £50,000, starting from April 2026, and the expansion of the electric car grant between 2025-2026 and 2029-2030.
The introduction of the mileage charge for electric vehicles is expected to reduce demand for EVs across the UK, as the charge increases their lifetime ownership costs. The Budget estimates that there will be approximately 440,000 fewer electric car sales across the forecast period as a direct effect of the mileage charge, with just 130,000 of those offset by the other incentives.
The Budget estimates that there will be approximately 440,000 fewer electric car sales across the forecast period as a direct effect of the mileage charge, with just 130,000 of those offset by the other incentives.
With just over four years until the 2030 ban on new petrol and diesel cars, it is imperative for the industry to prioritise the encouragement of EV ownership for UK drivers.
As more drivers consider the switch to electric, AX provides end-to-end incident management services to both EV and ICE drivers, with its network of expert bodyshops trained in all powertrain types, and like-for-like replacement vehicles available for those whose car needs to come off the road - including EVs.
EValuate, the latest initiative from AX, also provides ICE drivers with the opportunity to select an EV, for a real-world extended test to see if transitioning to electric would be viable in future.
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