UK’s Pay-Per-Mile EV Tax Threatens Adoption Amid Industry Backlash

The UK government will introduce a pay-per-mile tax on electric vehicles and plug-in hybrids starting April 2028, aiming to offset declining fuel duty revenues. The Office for Budget Responsibility projects the policy will reduce EV sales by 440,000 units, with drivers facing charges of 3 pence per mile for full EVs and 1.5 pence for hybrids. A typical EV driver covering 8,500 miles annually WOULD pay £255 yearly, generating an estimated £1.4 billion in revenue by 2030.

Automakers have reacted sharply to the measure. Ford's UK chair Lisa Brankin called it "the wrong tax at the wrong time," warning it creates confusion during the critical EV transition period. The Society of Motor Manufacturers and Traders echoed concerns, noting the tax could undermine demand while manufacturers struggle to meet existing EV sales quotas.

The MOVE comes as the UK maintains a freeze on fuel taxes for combustion engine vehicles, creating what industry leaders describe as a contradictory policy environment. Charging infrastructure providers remain conspicuously silent on the implications for network expansion plans.