Road Tax On Electric Cars

As of April 2025, owners of all electric cars and vehicles will have to pay road tax. Though this will be at the lowest rate for the first year – currently just £10 – from the second year it will be priced at the standard rate of VED. Electric cars registered from 2017 onwards will also need to pay road tax, and will be charged at the standard rate of VED. At the time of writing, this is £195.

In addition to this, electric cars are no longer exempt from the 'Expensive Car Supplement' scheme. This means that anyone buying a new electric car for £40,000 or more will also have to pay a £425 supplement every year for five years, from the second to the sixth year of registration. This is in addition to £195 in tax from year two onwards.

Electric cars were among a list of vehicles that are tax-exempt, alongside other categories such as disabled passenger vehicles, mobility scooters, powered wheelchairs and lawnmowers – not that we’re suggesting you take yours for a spin around the block – as well as historic vehicles. 

What’s a historic vehicle? It’s defined as a vehicle that is over 40 years old. So, if you have a car that’s over 40 years old, typically a classic car, you won’t need to pay tax. Bicycles, of course, are also exempt from tax – although they’re used on the road, the official term remains vehicle tax.

However, when we refer to tax on electric cars, the definition is clear, and quite strict. According to gov.uk: ‘the electricity must come from an external source or an electric storage battery not connected to any source of power when the vehicle is moving to be exempt.’ This means that it’s only pure electric cars that are currently tax-free. Plug-in electric hybrid and mild electric hybrid cars will need to pay tax.

For PHEV cars, the cost in the first year of road tax can range from £10 to £110, and after that it’s £195 per year.

The way road tax – or Vehicle Excise Duty (VED), to use its official title – is calculated has changed in the last 20-plus years. For all cars registered since March 2001, VED has been calculated based on the CO₂ tailpipe emissions of a vehicle. That’s why owners of older vehicles might typically see the cost of their road tax increase every year. For vehicles registered before March 2001, engine size is used to establish the price of road tax.

From April 1st, 2025, new electric cars will be subject to road tax, initially at the lower VED rate of £10 for the first year and then at the standard rate of £195 in subsequent years. Additionally, electric vehicles with a list price exceeding £40,000 will be subject to the 'Expensive Car Supplement' of £425 annually for five years, from the second to the sixth year of registration.

Find your perfect electric car with Dick Lovett. View our current range of stock here, including models from BMW,  MINI, Jaguar, Land Rover and Range Rover, and Porsche. Or, check out electric bikes at BMW Motorrad.

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