EV drivers set for pay-per-mile road tax

Consumer Editor

4 minute read|14th Jul 2026

The Government has confirmed that a new Electric Vehicle Excise Duty (eVED) will be introduced from April 2028, where fully electric cars will pay 3p per mile.

Plug-in hybrids (PHEVs) drivers will also have to pay 1.5p per mile, and rates for both types will rise with inflation from 2029 onward.

The scheme will apply to new and existing electric cars, plug-in hybrids, hydrogen fuel-cell vehicles (charged at the EV rate) and range-extender vehicles (charged at the PHEV rate).

Interestingly, electric vans, buses, coaches, HGVs and some specialist vehicles will be initially excluded from the new tax.

Drivers will have to provide their current odometer reading when renewing their eVED and then estimate the mileage they expect to drive over the coming year.

The options for payment will be annually, six-monthly or monthly through the existing DVLA/VED system.

All drivers can top up payments during the year if they exceed their estimate and carry unused mileage credits forward to the next year if they drive less than expected.

As part of the announcement, the Government has also abandoned plans for separate mileage inspections for newer vehicles below MOT age.

Instead, alongside the self-reporting of mileage, it will be compared during the annual MOT. This will be kept in record for future tests.

The MOT data will be sent to the DVLA, where it will be monitored over time.

Plans for new offences will be introduced for odometer tampering, as well as supplying or fitting mileage-altering devices.

The Government stated that extra inspections may still be required where fraud is suspected.

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When it comes to the sales of used electric and hybrid vehicles, any prepaid mileage credits will stay with the vehicle, and sellers will need to settle any outstanding liability before the sale.

Buyers will also be able to check paid mileage on the DVLA website.

Fleet and leasing companies will get tailored arrangements, with further announcements scheduled.

The Government is exploring an optional system allowing cars to report mileage automatically through built-in connectivity for these agreements. It says participation will be voluntary and location tracking will not be required.

As part of the announcement, the Government revealed that around 80% of eVED revenue from the first three years will be reinvested into relevant infrastructure and other forms of EV support measures.

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