Chancellor Rachel Reeves has unveiled plans to introduce a controversial 3p per mile charge for electric vehicle (EV) drivers, set to take effect from April 2028. The new levy, announced during November's Budget, aims to compensate for declining fuel duty revenue as more motorists transition from petrol and diesel cars to electric vehicles.
Reeves told the House of Commons that the charge would help "double road maintenance funding in England over the course of this Parliament." However, industry experts are warning that the move could backfire and undermine the government's net zero ambitions.
Industry Concerns Over EV Tax
John Wilmot, chief executive of LeaseLoco.com, fears the charge could deter people from making the switch to electric vehicles. He pointed to fresh YouGov data showing that 55% of prospective car buyers are still considering petrol engines, while only 37% are looking at electric options.
"One of the massive benefits to driving an electric vehicle was that it was far cheaper to run than a petrol or diesel car, but a pay-per-mile tax risks eliminating that advantage," Wilmot explained. EV owners are already facing mounting costs, including higher insurance premiums and charging fees.
Government Measures and Mixed Signals
The Chancellor has pledged £200 million towards expanding EV charging infrastructure and raising the expensive car supplement threshold to £50,000. According to Reeves, this would save over one million motorists £440 annually.
But Wilmot cautioned that the mixed messages could slow progress towards environmental goals. "Drivers want clarity before committing to making the switch to electric," he said.
The new pay-per-mile charge represents a major shift in how road tax is paid by drivers, with potential implications for the adoption of electric vehicles and the UK's net zero targets.
