Cough up! Electric car drivers will pay for every mile they drive from 2028

The UK government has confirmed a pay-per-mile road tax for EVs and PHEVs from 2028 in the latest budget, as rumoured a couple of weeks back.

Under the new levy, fully electric vehicle drivers will face a tax of 3p per mile, while plug-in hybrid drivers will face a tax of 1.5p per mile. This will increase in line with inflation.

According to the Office for Budget Responsibility (OBR), a driver travelling 8,500 miles in an electric car in 2028-29 can therefore expect to pay £255. This is roughly equivalent to half the rate that petrol and diesel drivers pay in fuel tax.

It forecasts that the new charge is expected to raise £1.1 billion in 2028-29, rising to £1.9 billion in 2030-31, but suggests that the new tax could result in around 440,000 fewer electric car sales over the next five years due to the increased lifetime ownership cost.

To incentivise buyers, the Government has committed an extra £1.3 billion to extend the Electric Car Grant until 2030, as well as £200 million for improving charging infrastructure.

In other budget news, Chancellor Rachel Reeves also announced its freeze on fuel duty will continue until September 2026. Another kick in the teeth for EV owners?