Rural drivers to face steepest bills under UK’s mileage-based electric vehicle tax | Electric, hybrid and low-emission cars
Motorists in the south-west of England will pay almost four times more than those in London due to Labour’s mileage-based tax on electric cars, according to an analysis of official data.
The 3p per mile road charge, announced in the autumn budget and expected to come into force in 2028, is expected to raise £1.1bn a year, partly offsetting the loss of fuel tax revenue as motorists switch from petrol to electric vehicles.
The analysis underlines how severely rural drivers will be affected compared to their urban counterparts. Critics warn that inequality risks creating another barrier to electric vehicle uptake, just as ministers are trying to boost sales.
The research suggested drivers in the south-west would be hardest hit, paying an average of £110.25 extra a year due to the 3p per mile charge, followed by the East Midlands on £105.09.
People in London will pay just £33.09 a year despite already having the highest density of electric vehicles and charging points. The next most affordable regions, the north-east and north-west, would average £82.20 and £83.79.
Thom Groot, chief executive of The Electric Car Scheme, a leasing group that carried out the analysis, said the tax could deter EV uptake at a time when the government is trying to move ownership “from early adopters to the mass market”.
“There are still a lot of people in the market who are skeptical of electric vehicles… so anything that gives people a reason not to be skeptical.” [buy one] “It creates another boundary.”
People living in smaller, rural towns and villages close to cities will pay the highest on average, at £156.51 a year. Those living in urban areas and cities will pay £76.02.
The research was based on 2024 data from the annual National Travel Survey.
Electric car sales rise by almost a quarter to a record 473,000 in 2025; This makes up about 23.4% of the total market, but is still below the 28% target in the national plan known as the zero-emission vehicle mandate.
Groot added: “Even if this tax comes through, the huge savings and environmental benefits of going electric will remain intact. Electric vehicles will remain the most practical and future-proof choice for drivers in the UK.”
The mileage-based charging was announced alongside a £1.3 billion increase to the electric car grant, which gives buyers up to £3,750 off the price of a new EV. The Office for Budget Responsibility has estimated that the tax could reduce EV sales by about 440,000 over five years.
Authorities are advising on a 3p per mile tax for plug-in hybrid drivers until mid-March, reduced to 1.5pa per mile.
Fuel duty is expected to rise by £24bn this financial year, but revenues are already falling from £27.5bn in 2019-20.
A government spokesman said: “Similar to fuel tax, those who drive more will pay more. Currently electric car drivers pay no fuel tax, while petrol drivers pay around £480 a year. This is unfair. Under the new system, electric vehicles will pay half the tax of petrol cars; still the cheaper, greener choice.”
