Electric vehicle drivers across Britain are set to face significant new running costs following the government's latest Budget announcement, which confirmed the introduction of a pay-per-mile charge starting in April 2028.
The New Charge Explained
Financial experts at MoneySuperMarket have analysed the potential impact of this new levy, revealing that the average EV driver could pay an additional £243 per year. This calculation is based on the proposed rate of 3p per mile for fully electric vehicles and the average annual mileage of 8,116 miles derived from insurance quotes submitted in 2025.
The new taxation system will also affect plug-in hybrid vehicle owners, who will be charged at a lower rate of 1.5p per mile. To help motorists understand the potential financial impact, MoneySuperMarket has developed an online calculator that allows drivers to estimate their annual costs based on their vehicle type and personal mileage.
Keeping Perspective on EV Costs
Kara Gammell, personal finance and car insurance expert at MoneySuperMarket, offered reassurance to concerned EV owners. "While the introduction of this new tax in April 2028 may feel like a setback for many electric vehicle drivers, it's important to keep the bigger picture in mind," she stated.
"Even with this additional cost, EVs are still expected to have lower running costs compared to petrol and diesel cars. Currently, drivers of petrol or diesel vehicles pay around £600 a year in fuel duty, whereas our analysis suggests the predicted average annual charge for EVs will be about £243 – less than half the current cost for traditional fuel vehicles."
Silver Linings for Electric Vehicle Owners
There's positive news on the insurance front for electric car owners too. MoneySuperMarket's latest figures show that insurance costs for electric cars have fallen by approximately £137 since March this year, bringing the average premium down to £587.
Gammell noted: "This puts EV insurance costs almost in line with petrol and diesel vehicles, which is a positive step for those considering the switch."
She added an important caveat: "Of course, these figures are based on averages and individual costs will vary depending on factors such as your driving history, location and the type of vehicle you choose. That's why it's always worth shopping around to find the best deal for your circumstances."
