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Electric vehicles (EVs) currently benefit from free road tax, known as Vehicle Excise Duty (VED), in the UK. However, significant changes are on the horizon. From 1 April 2025, drivers of electric cars will be required to pay road tax for the first time. These changes will impact hundreds of thousands of EV owners and increase the overall running costs of electric vehicles.
Many of these road tax changes will be backdated, meaning drivers who have never paid for VED before will be required to do so starting 1 April 2025. To help you navigate the upcoming changes, we've compiled a guide outlining the VED costs EV owners can expect now and how much they will pay when the new tax rules take effect, and how to mitigate this cost.
As it stands, drivers of electric vehicles do not have to pay road tax, although they still need to get their vehicle taxed. To be exempt from paying VED, the electricity used to charge the vehicle must come from an external source such as a private or public chargepoint, an electric storage battery not connected to any source of power when the vehicle is moving, or hydrogen fuel cells. For most other vehicles, including hybrids that can generate their own electricity, vehicle tax must be paid annually.
Starting from 1 April 2025, drivers of electric vehicles will need to pay VED for the first time. For most EV drivers, this will be £195 annually. However, drivers of new electric cars with a list price exceeding £40,000 could pay up to £620 annually.
The 2025 EV road tax changes are as follows:
In addition to road tax, EV owners should be aware of other annual payments:
Electricity Costs: Charging an electric car at home will increase electricity consumption, with costs depending on vehicle efficiency, local electricity rates, and miles driven.
Car Insurance: EV insurance costs vary based on driving history, vehicle model, and insurance provider.
Maintenance: Electric cars generally require less maintenance due to fewer moving parts. However, routine maintenance costs, such as tire rotations and brake pad replacements, still apply. Consult your trusted local garage for the best information on vehicle maintenance.
Road tax, also known as VED or car tax, is an annual payment for motor vehicles used or parked on public roads in the UK. It contributes to maintaining and improving road infrastructure. From 2025, zero emission vehicles and electric cars will need to pay road tax VED for the first time. It's essential for all vehicle owners to stay updated on the latest regulations and potential financial benefits available to electric vehicle owners in the UK.
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