HM Treasury has confirmed new 3p per mile road tax charges for electric vehicles (EVs) under the eVED scheme, set to take effect from April 1, 2028. The tax will apply to EVs at 3p per mile and to hybrids at a reduced rate of 1.5p per mile, with annual increases tied to inflation. The scheme aims to replace revenue lost from declining petrol and diesel taxes, which currently contribute billions to the Treasury.
Optional 5G Tracking and Data Transmission
As part of the plan, drivers will be required to provide an odometer reading at MOT time and estimate their mileage for the coming year. However, the government also outlines that many modern EVs and plug-in hybrids (PHEVs) have built-in 4G or 5G connectivity, enabling real-time mileage data transmission to the government. This data transmission will be optional for drivers, with those opting in benefiting from a quicker and more flexible system. The government states: "Making use of mileage data that cars already report will be optional, but those that do opt in will benefit from a quicker, easier to use, and more flexible system."
Privacy Protections and Mileage Tracking
Due to privacy concerns raised during consultations, the government has ruled out tracking where mileage occurs. This means the pay-per-mile scheme cannot differentiate between UK and foreign miles, so EV drivers driving abroad will still pay tax on that mileage to the UK. The government explains: "As set out in the consultation document, the government has ruled out charging tax based on where people drive, to protect motorists’ privacy. This means non-UK mileage driven by UK registered cars will be included within the scope of eVED."
Expensive Car Supplement Threshold Raised
The government also plans to raise the threshold for the VED Expensive Car Supplement, which imposes a higher tax rate on luxury EVs at first registration, from £40,000 to £50,000.
Industry Reaction and Concerns
Nick Connor, chief executive officer at the Institute of the Motor Industry (IMI), welcomed that telematics through 4G and 5G connections will not be mandatory. However, he raised concerns about odometer tampering and mileage recording issues at garages. He said: "The consultation outcome shows the government has genuinely listened to the automotive profession. Ruling out mandatory telematics, building eVED into the existing VED and DVLA systems, anchoring mileage validation in the MOT, and committing to simple reconciliation and sensible arrangements for fleets and lifecycle events are all things the IMI called for. That is a pragmatic foundation, and we welcome it."
Connor added: "However, there is one big question the response does not yet answer: can eVED be delivered safely and consistently if the system assumes every MOT garage can deal with EV mileage anomalies? The risks around odometer tampering, mileage data being held in more than one place in a vehicle, and the central role MOT garages will play in recording mileage have been recognised in the consultation response, yet there is no clear plan of how those risks will be managed on the workshop floor."
He urged the government to adopt practices proposed by the IMI, including clear diagnostic escalation routes, competence-based accreditation aligned with IMI TechSafe, and support for garages on equipment and training. Without these, he warned, disputes will fall inconsistently on garages, motorists, and the DVLA, undermining public confidence in the new tax.
