We all love our EVs. 95% of us would recommend them to friends and family, and two-thirds of us believe our general experience of driving electric, and using the public charging network, is improving.
However, we are in a situation where only 5% of cars on the road are electric; where half of those without driveways are paying more to run their EVs than their old petrol and diesel cars; and where nearly 40% of drivers believe electric will never work for them.
So whilst we welcome the fact that this week’s Budget recognised the need for more support to make the transition to EVs a success, the parallel introduction of a new electric VED tax in only two years is like putting the brakes on any momentum we have been building to get more and more drivers to switch to electric.
Plus, it is adding extra cost to those reliant on public charging and already paying more to drive an EV – and let’s be clear, that is already a huge disincentive to switch to electric. Those households without a driveway currently make up less than 10% of the EV driving population but almost 40% of the full driving population.
No-one is suggesting that the discussion of how to make EV drivers pay their way in the future shouldn’t happen, and many of our members believe it is the right thing to do. But many also believe this is the wrong time to introduce such a scheme.
It is therefore now vital that the driver’s voice is central to discussions around how any eVED scheme will be introduced and monitored. And it is critical that the support package around it genuinely tackles the biggest barriers preventing more people from switching to electric: the charging divide between those who have a driveway and those who do not; and the fact that incentives targeted at the new car market alone will not help the majority of households overcome the still significant upfront costs of buying an EV.
At EVA England, we submitted evidence to the Government asking for it to do more to reduce the upfront costs of buying electric; to extend Benefit in Kind rates; to adjust the threshold for the luxury car tax for EVs, and to take stronger action to tackle the cost of charging. We also campaigned for changes to planning rules so that it is easier to install cross-pavement technologies and allow more households to access affordable charging.
We welcome many of the announcements made this week. But we also need to make sure they are targeted to tackle those key barriers.
The £1.3bn top up to the Electric Car Grant needs to support lower income households to access EVs, and help boost the used EV market; benefit in kind rates need to be extended beyond 2030 and to the used market; and the public charging review needs to move swiftly to take concrete steps to bring down the costs of charging, particularly for those without driveways.
These are the points we will be making as we continue our discussions with HM Treasury and Department for Transport officials in the coming weeks.
The biggest news from the Budget was the introduction of a new electric Vehicle Excise Duty (eVED).
The Government will consult on the introduction of a new pay-per-mile charge for EV drivers: 3p per mile for full battery electric vehicles, and 1.5p per mile for plug-in hybrids, to be introduced in April 2028.
This will equate to around half of what petrol and diesel drivers pay per mile through fuel duty. An EV driver doing around 8000 miles per year will pay around £20 per month (£240 annually) in eVED compared to a petrol and diesel driver, who would pay around £40 per month in fuel duty (£480 annually) for the same mileage.
Drivers will be asked to estimate and pay for their projected annual mileage as part of their annual VED renewal; with the annual MOT being used to check this and allow for a balancing payment or credit. If your car is under three years old (and so not required to have an MOT check yet), you will be asked to do an annual mileage check at an accredited provider (likely to be an MOT test centre).
The idea is to make it as simple as possible for drivers, and to avoid any privacy issues that come with the use of telematic devices for tracking driver movements.
For plug-in hybrid drivers however, it is not that simple. They will pay fuel duty for miles driven in petrol, and 1.5 pence per mile for miles driven in electric – with clear questions for HM Treasury on what this actually means in practice for drivers when reporting their mileage.
HM Treasury have launched a 16-week consultation on the scheme, very much focused on the design and delivery of the scheme, rather than the principle of the scheme.
At EVA England, we will be representing EV drivers at any consultation events and in our overall response. We will be running a workshop, and potentially a flash survey, to gather views from drivers in the New Year – watch this space for more details on that.
It is now well known that HM Treasury believe the potential impact of the scheme could be a projected loss of 440,000 in new EV sales by 2030 – which is a significant amount.
They have also announced a support package around the scheme, which they believe will reduce this impact down to a loss of 120,000 in new EV sales.
EVA England submitted evidence to the Government asking for greater support for consumers buying electric; for extension of Benefit in Kind rates; for adjustment of the threshold for the luxury car tax for EVs, and for stronger action to tackle the cost of charging. We also campaigned for changes to the planning rules to make it easier to install cross-pavement technologies and allow more households to access affordable charging.
We welcome many of the below. But we also need to make sure they are targeted in the right way. This includes:
1. £1.3bn additional funding for the Electric Car Grant, with the grant running until 2029-30, totalling £2bn in funding over a five-year period:
- Our latest survey shows that half of drivers still struggle with upfront costs, and that less than a quarter of EV drivers earn below £ 25,000 a year.
- It also shows that the used EV market is not keeping pace with the EV transition: whilst around 80% of drivers buy on the used car market, less than a quarter of EV drivers do. The used car market is a vital part of the overall car market, particularly for lower-income households.
- It is therefore critical that this additional funding is focused on helping those on lower-income to access EVs, including through the used car market.
- At EVA England, we have partnered with T&E to explore how this might be done, and will discuss this further with members at our workshop on ‘Access to lower cost EVs.
2. Delaying changes to benefit-in-kind rules for Employee Car Ownership Schemes until April 2030
- Our surveys show that favourable Benefit in Kind rates and salary sacrifice schemes are becoming increasingly important in persuading consumers to choose electric: drivers may not have been thinking electric, but a scheme that makes it cheaper to lease and own an EV than a petrol or diesel car will often encourage them into the vehicles.
- This announcement extends the favourable Benefit in Kind rates until 2030, and is very welcome news.
- However, we want to see these rates extended to the used car market to support more households to access electric, and for there to be scope to extend them beyond 2030 if fewer drivers than forecast choose electric as a result of the new eVED scheme.
3. Raising the threshold at which new EVs pay the VED Expensive Car Supplement from £40,000 to £50,000, saving over a million EV drivers £440 per year
- With the upfront cost of EVs still around 13% higher than upfront costs for petrol and diesel cars, this is welcome news.
- Changes will be brought in from 1 April 2026, and will be applied to all zero-emission vehicles registered from 1 April 2025.
4. A public charging review
- Starting in the new year, and reporting by the autumn, this will look at the impact of energy prices and other factors contributing to the current high costs of public charging and how to lower these costs for consumers.
- This review is absolutely vital: respondents to our survey believe the cost of public charging is now the single largest barrier to people switching to electric.
- But it is also critical that this review moves quickly and identifies ‘quick win’ actions that will lower public charging costs as soon as possible for drivers – and include looking at the role of the regulatory regime, overseen by the regulator Ofgem, in doing this.
- At EVA England, we will be contributing to this review and will discuss its content and next steps with members at our workshop on ‘The Charging Divide’.
5. An additional £200m for public chargepoint rollout
- This includes a £100m top-up to the £400m announced at the Spending Review, to support installation of home and workplace chargers; and £100m for local authorities to support training and deployment of specialist staff to help deliver chargepoint rollout on the ground.
- This is again welcome news, and our focus is now on ensuring these funds are targeted where they are most needed – towards areas that are struggling with chargepoint roll-out and therefore struggling to support local drivers wanting to make the switch.
- Our new constituency dashboard will help guide our discussions on this with Government and local authorities.
6. Launching a consultation on permitted development rights for cross-pavement EV charging
- A key campaign area for us, we secured a commitment from Government to do this in their response to one of our amendments to the Planning and Infrastructure Bill.
- These changes will make it easier and cheaper for those without off-street parking to connect to their home energy tariff, and access more affordable charging.
- You can find the consultation here.
- We will collect additional evidence from drivers to inform our response to this consultation, and we want to hear from those who want to or are already using cross pavement technologies, as well as those who have views on their roll-out in their local area. Look out for a flash survey seeking views on this in the coming weeks.
7. Introducing a ten-year 100% business rates relief for EV chargepoints and EV-only forecourts
- First raised as an issue by ChargeUK, who represent the charging industry, we joined their calls to continue to exempt chargepoints from business rates – which, if introduced, would have increased the costs of public charging even further.
- We therefore welcome the news that the charging industry will be exempt from these rates for a further ten years.
8. A one-year extension to 100% First Year Allowances for zero-emission cars and electric vehicle chargepoint infrastructure
- A form of corporation tax relief for businesses acquiring zero-emission cars or installing chargepoint infrastructure, this is aimed at continuing to incentivise investment in the UK EV market.
9. A future rise in fuel duty
- Not dwelled on as much as it could have been in the media surrounding the Budget, but extremely important as a parallel measure to any eVED scheme if we are to persuade drivers that it is cheaper and better to run an EV than a petrol or diesel equivalent. The Government has announced that from September 2026, it will begin to unfreeze the current temporary 5p fuel duty cut, and allow fuel duty to rise in line with inflation.
This blog post was originally released as an early-access feature for EVA England members, to give them a deeper look into the policies that are shaping the EV transition.
To gain early access to insights like this, you can support EVA England by becoming a member today.
