The new 3p-per-mile EV road tax — what it could mean for your running costs
Electric vehicle drivers in the UK are facing the prospect of a new form of road tax, with plans for a 3p-per-mile charge on fully electric cars and a lower rate of 1.5p per mile for plug-in hybrids. The move is designed to plug a growing gap in fuel duty as more motorists move away from petrol and diesel, but it has left many EV owners wondering what it will mean for their day-to-day costs.
For now, nothing changes overnight. The new system is expected to take effect from April 2028, and there is still detail to be finalised on how mileage will be recorded and billed. However, the broad outlines are clear enough for drivers to start planning ahead – and to get a sense of whether running an EV will still work out cheaper than a petrol or diesel car.
What has been announced?
Under the proposals, most privately owned battery-electric cars would move onto a mileage-based road tax of 3 pence for every mile driven. Plug-in hybrid vehicles would be charged at a lower rate of 1.5 pence per mile, reflecting the fact that they still buy fuel and therefore continue to pay fuel duty at the pump.
The new charge is expected to sit alongside existing Vehicle Excise Duty (VED), which EVs are already scheduled to start paying from 2025. Unlike VED – which is a flat annual fee – the 3p-per-mile charge is designed to scale with how much you drive, bringing EVs more in line with how the government currently collects tax from petrol and diesel drivers.
Although the technical details have yet to be confirmed, the most likely options for recording mileage include:
- Mileage readings captured at MOT or annual service
- Data from connected vehicles, where owners give consent
- Smart-charging systems that can estimate annual distance travelled
For most drivers, the important question isn’t the technology in the background – it’s what the new tax could add to their monthly budget.
What does 3p per mile look like in real journeys?
A flat rate of 3p per mile sounds small on paper, but it adds up over a year. To illustrate the impact, we’ve looked at several typical UK journeys using the proposed rate for fully electric cars. The tall graphic on the right of this page shows how the cost changes on a map of the country, but the table below gives the headline numbers.
| Journey | Return distance | 3p-per-mile cost |
|---|---|---|
| Newcastle to Glasgow | 332 miles | £9.96 |
| Manchester to Brighton | 519 miles | £15.57 |
| Edinburgh to Bristol | 746 miles | £22.38 |
| Oxford to Cambridge | 204 miles | £6.12 |
| 10,000 miles driven over a year | Annual mileage | £300 per year |
| 12,000 miles driven over a year | Annual mileage | £360 per year |
For a typical driver covering between 8,000 and 12,000 miles a year, the new tax would add somewhere between £240 and £360 annually to their running costs. That works out at roughly £20–£30 per month on top of electricity, insurance, maintenance and any parking or congestion charges.
How does this compare with petrol and diesel?
Petrol and diesel drivers already pay significant tax through fuel duty and VAT every time they fill up. The exact amount varies with the price at the pump and how efficient the car is, but for a typical family hatchback doing around 40–45 mpg, fuel duty alone often works out at around 7–8p per mile.
Even with a 3p-per-mile charge added on, most EV drivers will still be paying less tax per mile than a petrol or diesel equivalent. The difference is especially clear for those who can charge regularly at home on a cheaper overnight tariff, where the electricity cost per mile is already substantially lower.
Where the new tax will be felt more sharply is by drivers who rely heavily on public rapid charging at motorway services or retail parks. Those prices are already closer to petrol and diesel in pence-per-mile terms, so adding a distance-based tax narrows the gap further.
Who is likely to feel it most?
The impact of a mileage-based tax is naturally bigger for those who cover more ground. High-mileage drivers such as sales reps, long-distance commuters, gig-economy workers and some fleet users could see several hundred pounds a year added to their costs.
For lower-mileage households – for example, city-based drivers who mainly use their EV for local trips, school runs and weekly shopping – the effect will be smaller but still noticeable. A car doing around 5,000 miles a year would face an annual bill of about £150 at the 3p-per-mile rate.
Plug-in hybrids sit somewhere in the middle. They would attract the lower 1.5p-per-mile charge but still pay fuel duty when running on petrol or diesel. How they fare overall will largely depend on how often they are plugged in and driven in electric mode.
Why battery health still matters
Whatever happens with road tax, one thing hasn’t changed: the traction battery remains the most expensive component in a modern EV and the key factor in real-world range and future resale value.
If you’re going to be taxed on every mile you drive, it becomes even more important to know that the car can deliver the range you’re expecting. An EV with a strong, healthy battery will:
- Travel further on each charge, making every taxed mile more productive.
- Be easier to live with on longer trips, with fewer unplanned rapid-charging stops.
- Typically hold its value better in the used market, particularly as buyers become more aware of battery health.
That’s where an independent battery health report can help. MyEVReport tests the State of Health (SoH) of the battery, estimates real-world range and provides a clear condition rating that can be shared with buyers, dealers or finance companies.
What happens next?
The new mileage-based system is still several years away, and there is time for the details to change as it moves through the policy process. The broad direction of travel is clear, though: as more drivers switch to electric, governments will look for ways to replace the tax revenue that used to come from fuel duty.
For existing and prospective EV owners, the key takeaway is that electric cars are still likely to offer lower running costs than petrol and diesel – especially if you can charge at home – but the sums are becoming more finely balanced. Understanding your annual mileage and the condition of your battery will be central to working out whether an EV is still the right choice for you.
