10:57 am, July 14, 2026
The government’s pay-pay-per-mile scheme for electric vehicles will be introduced in April 2028, it has been confirmed.
Car Dealer reported last year that Labour was planning on introducing a 3p per mile charge on EVs as part of a plan to combat falling revenue from fuel duty.
The announcement, which was included in last November’s Autumn Budget, was followed by a lenghty consultation, which has now been concluded.
After taking views from experts and members of the public, the government has decided to plough ahead with the plans.
Ministers say drivers of electric cars required to pay the 3p per mile charge, while owners of plug-in hybrid models will pay a lower rate of 1.5p per mile.
Both stand at less than the equivalent 6p per mile that drivers of petrol and diesel cars pay in fuel duty.
The government says that the new eVED system will be calculated through the use of driver mileage estimates and an upfront charge paid based on that figure. Drivers will also be able to spread the cost through monthly payments, much like regular VED.
Motorists will then submit an actual mileage reading at the end of the year and this will be backed up by a mileage reading at the car’s annual MOT or, for new cars, around the second or third registration anniversary.
At the end of the year, drivers will see their balance and either pay any outstanding amount or spread this cost through the following 12-month period.
For new electric cars, there will be the option to combine eVED mileage into the on-the-road pricing of a vehicle, or drivers can arrange this independently.
However, since taxing drivers based on when and where they drive has been ruled out, EV owners also face paying eVED when travelling abroad.
While not a policy for now, the government also said it ‘welcomes’ an investigation into on-board telematics data which would relay mileage in real time – but this will not be made mandatory.
Compared to the original plans, only a handful of changes have been made, following the consultation.
Under the revised approach, new electric vehicles under three years old will no longer require additional mileage inspections before their first MOT.
Meanwhile, reporting requirements for fleet operators and leasing companies have also been streamlined, with businesses permitted to use estimated mileage in certain circumstances.
The government is also planning to introduce bulk licensing arrangements and more flexible payment options in a bid to improve ease of use.
Despite this, experts remain split on the plans put forward.
Vicky Edmonds from Electric Vehicle Association England, says that the move ‘still does not work for drivers’.
She said: ‘The Government has made one welcome change for newer EVs, but the wider scheme remains too complex, risks leaving people out of pocket and fails to give drivers the confidence they need.
‘At such a crucial point in the switch to electric, ministers should be making the system simpler, fairer and easier to understand, not pressing ahead with a policy whose key faults remain unresolved.’
‘This now piles pressure on the public charging review that must pave the way for affordable charging, or this transition simply won’t work for drivers.’
Meanwhile, the IMI has welcomed the news, describing the plans as a ‘pragmatic foundation’.
Nick Connor, CEO of the IMI, said: ‘The Consultation outcome shows the government has genuinely listened to the automotive profession.
‘Ruling out mandatory telematics, building eVED into the existing VED and DVLA systems, anchoring mileage validation in the MOT, and committing to simple reconciliation and sensible arrangements for fleets and lifecycle events are all things the IMI called for.
‘That is a pragmatic foundation, and we welcome it.’
