Rural Motorists to Bear Heaviest Burden Under New Electric Vehicle Mileage Tax
Drivers in the south-west of England would face annual charges nearly four times higher than those in London under Labour's proposed 3p-per-mile road tax for electric vehicles, according to detailed analysis of official government data. The research highlights significant regional inequalities that critics argue could hinder the nationwide transition to cleaner transport.
Stark Regional Divide in Proposed EV Taxation
The analysis, conducted by leasing group The Electric Car Scheme using 2024 National Travel Survey data, reveals dramatic variations in how the mileage-based charge would impact drivers across different parts of the United Kingdom. South-west England emerges as the hardest-hit region, with motorists expected to pay an average of £110.25 annually under the new system.
This contrasts sharply with London, where drivers would pay just £33.09 per year despite the capital having the highest concentration of electric vehicles and charging infrastructure nationwide. The East Midlands follows closely behind the south-west with projected annual charges of £105.09, while the north-east and north-west would average £82.20 and £83.79 respectively.
Urban-Rural Disparity Creates Additional Barrier to EV Adoption
The research further exposes a pronounced divide between urban and rural areas, with residents of smaller towns and villages near cities facing the highest average annual charge of £156.51. By comparison, those living in urban centres and major cities would pay approximately £76.02 annually.
Thom Groot, chief executive of The Electric Car Scheme, expressed concern that this taxation disparity could discourage electric vehicle uptake precisely when the government aims to transition ownership from early adopters to the mass market. "There remain many people in the mass market who maintain significant scepticism about electric vehicles," Groot stated. "Any policy that provides additional reasons not to purchase an EV creates yet another boundary to overcome."
Policy Context and Government Response
The 3p-a-mile road charge was announced in the autumn budget and is scheduled to take effect in 2028, with the government estimating it will raise £1.1 billion annually. This revenue would partially offset declining fuel duty receipts as drivers increasingly switch from petrol to electric vehicles. Fuel duty is projected to generate £24 billion this financial year, down from £27.5 billion in 2019-20.
A government spokesperson defended the policy, stating: "Similar to fuel duty, those who drive more will pay more. Currently, electric vehicle drivers pay no fuel duty while petrol drivers contribute approximately £480 annually. This situation is fundamentally unfair. Under the new system, electric vehicles will pay half the duty of petrol cars—remaining the cheaper, greener choice for consumers."
Broader Impact on Electric Vehicle Market
The proposed tax arrives alongside a £1.3 billion boost to the electric car grant scheme, which provides buyers with up to £3,750 toward the purchase of new electric vehicles. However, the Office for Budget Responsibility has estimated that the mileage charge could reduce electric vehicle sales by approximately 440,000 units over five years.
Electric car sales increased by nearly a quarter in 2025 to a record 473,000 vehicles, representing about 23.4% of the total market. Despite this growth, the figure remains below the government's target of 28% outlined in the national zero emission vehicle mandate.
Groot emphasized that despite the new tax, electric vehicles would maintain their economic and environmental advantages. "Even when this taxation measure is implemented, the substantial savings and environmental benefits of transitioning to electric vehicles remain firmly in place," he asserted. "Electric vehicles will continue to represent the most practical and future-proof choice for drivers across the United Kingdom."
Officials are currently consulting on the 3p-a-mile tax proposal, which would be reduced to 1.5p per mile for plug-in hybrid drivers, with the consultation period continuing until mid-March. The policy debate continues as stakeholders assess how regional taxation disparities might affect the nation's transition to sustainable transportation.
