Octopus EV offers to cover pay-per-mile road tax costs for drivers
The idea of a pay-per-mile road tax for electric vehicles has been circulating for several years, largely as a response to the steady decline in fuel duty revenue as petrol and diesel use falls.
Against that backdrop, Octopus EV has said it would absorb the cost of a future mileage-based road tax for its customers — a move that has attracted attention for what it signals about how the industry expects EV taxation to evolve.
What has Octopus EV actually said?
Octopus EV’s position is straightforward on the surface: if a national pay-per-mile charge for EVs is introduced, the company says it would cover those costs for drivers on its leasing and salary-sacrifice schemes.
The proposal is not a government policy, nor is it a confirmed part of any future tax system. Instead, it is a commercial promise tied to specific Octopus EV products — designed to reduce uncertainty for customers concerned about future running costs.
Why pay-per-mile charging is being discussed at all
Fuel duty currently raises tens of billions of pounds each year, and electric vehicles contribute very little to that total. As EV adoption increases, governments face a growing gap between road usage and road tax revenue.
A mileage-based charge is one of several options under discussion, alongside higher fixed vehicle taxes or changes to congestion charging. None have been finalised, and any system would likely take years to design and implement.
What the offer does — and doesn’t — cover
Octopus EV’s commitment is limited in scope. It applies to customers using its specific EV leasing products and does not represent a blanket exemption from any future tax for all drivers.
It also doesn’t remove the wider policy question. Even if some drivers are shielded from direct costs through commercial arrangements, a mileage-based system would still influence how EVs are priced, leased and insured across the market.
Why this matters beyond one company
The more interesting signal here is not the offer itself, but what it suggests about expectations. Companies are beginning to plan for a world in which EV taxation changes — even if the final shape of that system remains unclear.
That planning reflects a broader shift: the EV conversation is moving away from early adoption and incentives, and towards how electric vehicles fit into long-term transport funding.
What happens next?
Any national move to pay-per-mile charging would require legislation, public consultation and new technical systems. In the short term, the debate is more about direction than implementation.
For now, Octopus EV’s proposal sits as an example of how companies are positioning themselves ahead of potential change — rather than a signal that new charges are imminent.