LONDON – One of the Starmer government’s legacies is causing debate in London: the announcement that a road tax on both new and used electric vehicles will be imposed starting April 2028. Electric cars will have to pay three pence for every mile driven (about two cents per kilometer), while the cost for hybrid cars will be halved to 1.5 pence per mile. Electric vans, buses, and trucks will be exempt from the new tax, at least initially.
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In subsequent years, the tax will increase in line with inflation and is expected to generate £1.2 billion annually for the Treasury, partly compensating for lost revenue due to the increase in electric cars on the road.
The Government argues that the eVed (electric vehicle excise duty) system corrects an injustice, as electric car drivers have not been subject to taxes until now, unlike motorists who pay fuel excise duties every time they fill up at the petrol station. The tax on electric vehicles is about half of what drivers of diesel or petrol cars pay.
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The Government has dismissed criticism that the measure is counterproductive because the additional costs are a disincentive to buying electric cars, which authorities theoretically want to encourage.
Motorists will have to provide their odometer reading when renewing their annual inspection certificate and calculate their expected annual mileage. If they exceed the threshold, they can make additional payments, while if they use the car less than expected, they can use the credits obtained the following year.
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