What today’s budget means for EV drivers
From April 2028, the UK government will introduce a new mileage-based road-tax charge for electric and plug-in hybrid vehicles. That means roughly 3p per mile for battery-electric cars and about 1.5p per mile for plug-in hybrids.
For context: if you drive around 8,500 miles a year, you’re looking at an extra £255–£260 annually before accounting for inflation or changes in your driving habits. That’s roughly half the per-mile cost compared with traditional fuel duty for petrol or diesel cars.
This fee will come on top of existing taxes such as Vehicle Excise Duty (VED), so the total cost of running an EV will increase somewhat from 2028 onwards.
That said, this isn’t the end of EVs. What the government is doing is shifting from taxing fuel to taxing usage. As more drivers move away from petrol and diesel, it’s only natural road-use needs to be accounted for differently.
What this means for electric car drivers
- Predictable costs, based on actual use. With pay-per-mile tax, you only pay for the miles you actually drive.
- Flexibility becomes a strong advantage. Leasing gives you flexibility — no long-term commitment, simpler upgrades, and less risk if tax or regulatory conditions shift in the future.
- Still cost-effective compared with petrol vehicles. Even with the additional mileage charge, many EVs remain significantly cheaper to run — thanks to lower energy and maintenance costs.
How the “Luxury / Expensive Car Supplement” (ECS) has changed...
...and what that means for electric car buyers
High-spec EVs with a list price above £40,000 have been subject to the additional road-tax surcharge called the Expensive Car Supplement (ECS).
The good news: the government has raised the ECS threshold for EVs, meaning more mid and higher-spec electric cars will now avoid that surcharge. In practice, that makes switching to electric more accessible, especially if you’re looking at newer or more premium EV models.
Added to this, the Electric Car Grant (ECG) is still in place, giving discounts on many eligible new EVs and helping bring the overall cost of going electric down. Last week the new Nissan LEAF was confirmed to be eligible for the full £3,750 ECG. We're expecting this to be a 2026 bestseller, it'll be available to order in a few weeks.
Our view?
The electric vehicle revolution isn’t slowing. It's evolving
This Budget doesn’t kill the EV future — it reshapes the rules. Yes, running costs for EVs will rise. But the changes are designed to be fairer across the board: taxing road-use rather than fuel, helping fund infrastructure as EV adoption grows, and adjusting thresholds to reflect real EV prices.
For individuals, businesses, and fleets alike electric car and van leasing remains a smart, flexible way to stay ahead. If you want predictable costs, no long-term risk, and easy adjustments as policies change leasing still makes a lot of sense.
