Electric vehicle drivers, long accustomed to tax exemptions, face significant changes in 2025.
Starting April 1st, alterations to Vehicle Excise Duty (VED) will impact thousands as electric car ownership continues to rise.
Drivers of electric vehicles haven’t had to pay any tax on their cars for many years, but in 2025 that is set to change as several wide-sweeping tweaks come into force.
But what should drivers of electric vehicles expect and what is the change in terms of cost? Here, we explain what’s on the horizon.
What is the current state of tax for electric vehicles?
At present, electric vehicles incur no cost for VED. Though drivers don’t have to pay anything, they still have to get their vehicles taxed, going through the usual process that you might with a ‘regular’ car.
Electric vehicle registration numbers have continued to rise, too, with the Society of Motor Manufacturers and Traders showing a 41.6 per cent rise in the number of new EVs registered during January 2025.
Only completely electric cars are free-to-tax, though some extremely low-emission hybrids also qualify but only those produced between 1 March, 2001 and 31 March, 2017.
What’s changing in 2025?
As of April 1, 2025, things are set to change for electric vehicles. For the first time, drivers of electric vehicles will be required to pay VED, representing a significant hike in the cost of ownership. Plus, a new Expensive Car Supplement will see buyers of electric vehicles costing over £40,000 paying as much as £620 a year in tax.
For electric, zero or low emissions vehicles registered on or after April 1, 2025, drivers will have to pay the lowest first-rate of tax – £10 – but from the second tax payment onwards, this will rise to the standard rate of £195 a year.
Electric, zero or low-emission cars registered between April 1, 2017 and March 31, 2025, will now pay the standard rate of £195. In contrast, EVs registered between March 1, 2001 and March 31, 2017, will move to the first band that has a VED value, meaning a tax payment of £20.
Electric vehicles have also – up until this point – been exempt from the Expensive Car Supplement, but that all changes from April 1 with cars registered on or after this date are now liable for the additional cost. What does that mean?
Well, drivers of EVs costing over £40,000 will have to pay a standard rate alongside an additional supplement for the first five years from the start of the second payment. For many, this means many owners of an EV over £40,000 will pay £620 per year in road tax.
Will electric vehicles still prove cheaper to run than petrol and diesel cars?
These tax changes put a dent in the overall affordability of running an electric vehicle but, in many areas, they should still prove relatively inexpensive to run.
Much of this depends on whether or not an owner is able to access home charging as, with this, they can take advantage of super-low electricity rates offered by EV-friendly tariffs. For an average EV, this could mean a full charge bringing around 200 miles of range for as little as £5. It’s a different story if you can only use public charging, however, where costs are considerably higher.
Electric vehicles do require less maintenance than an equivalent petrol or diesel car, too, since there are fewer moving parts.
That said, EVs still need regularly checking over to make sure that key components are still working as required and consumables such as tyres, wipers and brake pads will still need to be replaced.
