Electric Cars to Pay Road Tax in Britain From 2025

The UK is set to introduce road taxes on electric cars from 2025, Chancellor of the Exchequer Jeremy Hunt said, ending an exemption that was intended to spur adoption of zero-emissions vehicles.

EVs will no longer be exempt from vehicle excise duty, Hunt said during Thursday’s Autumn Statement as he unveiled a series of tax rises and spending cuts designed to plug a £55 billion ($65 billion) hole in Britain’s public finances.

The chancellor said that EVs will still have lower company car tax rates and the government will limit rate increases to one percentage point a year for three years from 2025.

The UK plans to end the sale of new cars with internal combustion engines by 2030, and carmakers have long asked for incentives to spur the adoption of electric vehicles. The phasing out of the road tax exemption follows the slashing of electric vehicle grants last year.

“The prospect of additional running costs will drive more would-be buyers away from EVs when other incentives are being scrapped and high energy bills are eroding the advantages of going electric,” said Ian Plummer, commercial director at online marketplace Auto Trader Group Plc. 

“An excise duty raid is deeply unhelpful and sends the wrong message if we’re to be serious about getting EVs into the mainstream.”