UK to Impose 3p-per-Mile EV Tax Starting in 2028

The UK government has announced the introduction of an electric vehicle excise duty (eVED), effective April 1, 2028, which will impose a mileage-based tax on pure battery electric vehicles (BEVs) registered in the UK at a rate of 3 pence per mile and plug-in hybrid electric vehicles (PHEVs) at 1.5 pence per mile. This policy marks the world’s first nationwide mileage-based tax scheme for electric vehicles. Currently, drivers of petrol and diesel vehicles pay approximately 6 pence per mile through fuel duty, while electric vehicle owners—since they do not purchase fuel—do not contribute an equivalent amount. As EV adoption rises, fuel duty revenues continue to decline, widening the funding gap for road maintenance. The eVED aims to ensure that EV users contribute to road upkeep costs proportionally to their usage, and is not intended as a punitive measure. Mileage data will be verified through a combination of odometer readings taken during the annual MOT vehicle inspection and self-declared reports from vehicle owners; GPS tracking devices will not be mandatory. Buyers will have the option to prepay the tax at the time of vehicle purchase. Based on an estimated annual mileage of 6,000 to 7,000 miles, BEV owners can expect to incur an additional annual tax burden of approximately £180 to £210. Starting in 2028, EVs will also resume payment of the standard Vehicle Excise Duty (VED), significantly narrowing their current cost advantage over conventional vehicles. Industry reactions have been mixed: some argue that the proposed rates—roughly half those paid by internal combustion engine vehicle owners—help close a critical revenue gap while supporting the transition to electrification, while others express concern that implementing the tax too early could dampen consumer willingness to adopt electric vehicles.