Road Tax on Electric Cars: UK Guide to EV Vehicle Tax

Understanding Vehicle Excise Duty (VED)

Vehicle Excise Duty (VED), commonly known as road tax, is an annual taxation that must be paid by anyone with a vehicle classed as roadworthy by the DVLA. The VED rate paid by each driver depends on the vehicle’s list price (recommended retail price) for the first year, and how much CO2 emissions it produces for subsequent years. 

How is Road Tax Calculated for EVs?

Emissions-Based Road Tax System

Historically, the emissions-based road tax calculation has meant that electric vehicles were exempt from road tax due to the fact they produce zero exhaust emissions. However, this changed in April 2025.

Differences Between EVs and Traditional Vehicles

In the context of road tax, the main difference between EVs and traditional internal combustion engine vehicles was in their CO2 emissions profile. Electric cars don’t produce any tailpipe carbon emissions, which is why they’ve been exempt from VED for most of the time that EVs have been available on the UK auto market.

From April 2025, however, EV drivers of all-electric vehicles with zero emissions will have to pay a first year VED charge of £10, and then the standard rate of road tax for subsequent years, meaning they won’t be able to enjoy the historic exemption from emissions-based VED.

Where EVs used to be exempt from the Expensive Car Supplement, this also changed from April 2025, with new EVs with an OTR price of £40,000 or more liable for an additional £425 per year from year 2 to year 6 of ownership - over and above the standard road tax charge. This change came as part of the 2022 Budget, and is intended to create a fairer taxation landscape as electric vehicles start to make up a larger proportion of all the cars on the road.

While the increase in road tax (VED) for electric vehicles may be discouraging to some, it is important to remember that rising fuel costs and emissions-based taxes for conventional fuel-powered vehicles are also driving up the total cost of ownership for vehicles across the board. Even with the VED adjustments, an electric vehicle may still offer the most sustainable and cost-effective option for your next vehicle. 

What Will Change in 2025?

The key road tax changes for EVs are as follows:

• EVs registered on or after April 1st 2025 will have to pay the lowest rate of road tax in their first year, which is currently £10.
• From the vehicle’s second year onwards, drivers will be liable to pay the standard rate of road tax, which will be £195 per year from April 2025.
• EVs registered in the period where the tax exemption was in effect, (1 April 2017 to 31 March 2025), will also be subject to the standard rate of road tax.
• EVs’ exemption from the Expensive Car Supplement will also end in April 2025. This additional tax applies to all cars with a list price of £40,000 or more, and is set at £425 per year from April 2025.

How Will These Changes Impact Electric Car Owners?

The upcoming changes to UK EV road tax are unfortunately set to have a slight negative impact on the affordability of driving an electric car. Without the long-standing exemption on VED, EV drivers will now have to pay the same rate of tax as any other driver, albeit with a cheaper rate of tax in the first year of ownership.

Although owning an EV is about to become more expensive, the government equalising road tax for electric and ICE cars can be seen as a positive sign of EVs becoming more popular and readily available. Over time, this trend may encourage more competitive pricing for electric cars and further development of general EV infrastructure, helping to make EV driving more affordable overall.

It’s also worth noting that with the first year rate of road tax, this is also being significantly increased for ICE vehicles, with vehicles emitting more than 256 g/km of CO2 being charged £5,490 - compared to £10 for a BEV - so there’s still substantial savings to be made from picking an EV. 

Another key takeaway from this shift is that EVs are no longer a niche choice but a mainstream option for UK drivers. The increase in the number of electric vehicles on the road means they now form a significant proportion of road users, making it logical for them to contribute to public infrastructure funding, just as petrol and diesel vehicles do. While this change may feel like a drawback, it actually reflects the success of EV adoption and its growing presence in the market. As the balance between petrol and diesel vehicles and EVs continues to shift, we can expect even more investment in public charging infrastructure and cleaner, more efficient transport solutions for all. 

Is Road Tax Still a Financial Advantage for EVs?

Though vehicle emissions will soon have a reduced impact on how much road tax you pay, the fact that fully-electric cars are classed as zero-emission vehicles still provides some advantage when it comes to road tax.

Unlike ICE cars, electric vehicle owners will only have to pay the lowest band of road tax, currently £10, for their first year of registration.

Electric Cars vs Petrol/Diesel Cars

Electric Cars vs Plug-In Hybrids

Maintenance Costs Compared to Traditional Cars

EV’s have more straightforward maintenance needs compared to ICE models and tend to be more affordable when it comes to repairs and replacements.

Some of the key differences that mean you can look forward to lower maintenance costs with an EV include:

Fewer Moving Parts: EV drivetrains typically have less moving parts compared to petrol and diesel models. This means there’s less opportunity for normal wear and tear during normal driving.

Regenerative Braking: EVs have regenerative braking, which requires less pressure on the brake pads compared to standard friction brakes. This translates to less wear on the brake pads, and means you’ll be able to go longer without replacing them.

Lack of Engine Fluids: Unlike ICE cars, EVs don’t require engine oil, transmission fluid, oil filters, or any of the associated components. This means you won’t have to worry about the cost of regular fluid changes, checks, or top-ups.

Over-the-Air Software Updates: Because EVs are generally newer models compared to many ICE cars on the road, a greater proportion offer over-the-air software updates which can solve a variety of technical issues. 

Less Frequent Services: Due to being less prone to mechanical issues, EVs tend to have longer recommended service intervals compared to petrol or diesel models. This means you can schedule less trips to the mechanic and lower the likelihood of repairs, while still keeping your car in good working order.

Insurance Costs for Electric Vehicles

One of the key advantages that EVs have over ICE vehicles is their cheaper running costs. This is why many drivers are surprised to find out that EVs tend to be more expensive to insure compared to standard petrol or diesel models.

While this disparity may start to equalise as EV vehicles become cheaper and more common on the roads, there are still several reasons why EVs tend to be more expensive to insure, including:

Availability of Replacement Parts: Because EVs are still a relatively new technology, replacement parts can be harder to source, and therefore more expensive when they’re necessary for repairs. Insurers will take this into account when providing quotes for an electric car.

The Value of the Car: The list price of a car is a fundamental factor that insurers will consider when setting the price of a policy. EVs in general are more expensive than traditional ICE cars, and will cost more to replace if the car is stolen or written off.

Specialised Repair Needs: As EVs are still relatively new, not all mechanics are familiar with their construction and the techniques needed to tackle electric vehicle repair. Because repairs and replacements may require you to find specialised and more expensive mechanics, this may be reflected as higher premiums.

Rate of Acceleration: Though this isn’t always the case, many EV models are equipped with motors that give a higher rate of acceleration compared to their ICE counterparts. Some insurers will class this as a risk factor that can raise the price of insurance.