The Government has confirmed that Electric Vehicle Excise Duty (eVED) will go ahead on 1 April 2028. The tax was first announced in the Autumn Budget 2025, but this year's Budget added detail on how it will work in practice, including a mileage estimation tool and an optional system called eVED Connect.
What is eVED?
eVED is a mileage-based charge on electric, plug-in hybrid and hydrogen fuel cell cars. It will be paid alongside existing Vehicle Excise Duty (VED), not instead of it, and will apply to new and existing vehicles. It is designed to make up some of the fuel duty revenue the Government expects to lose as more drivers switch to electric.
The rates
- Battery electric and hydrogen fuel cell cars: 3p per mile
- Plug-in hybrids: 1.5p per mile
The rates will be uprated in line with CPI inflation from 2029/30.
What the Budget added
Many in the industry had hoped for changes or greater clarity ahead of the Budget. Instead, the Government confirmed that the tax will go ahead at the announced rates and set out more detail:
- Mileage estimation tool: A GOV.UK tool that will be available when eVED launches in April 2028, helping drivers work out roughly how many miles they will cover each year. It is aimed at individual drivers rather than fleets.
- eVED Connect: An optional system that will let drivers use their vehicle's built-in connectivity instead of reporting mileage manually. It has been announced, but there is no date yet for when it will be available.
- Automated refunds: The Government is aiming to introduce automated refunds by 2030 for drivers who overestimate their mileage or sell their vehicle.
- Fleet guidance: The Government has promised further guidance for fleet operators later this year.
What fleets and leasing customers should do now?
- Add eVED at 3p per mile to whole-life cost calculations for any electric car you expect to run beyond April 2028.
- Evaluate your highest-mileage vehicles first, as they will feel the charge most.
- Look out for the promised fleet guidance and check how your leasing agreements treat the extra cost.
Frequently Asked Questions
eVED starts on 1 April 2028.
It is 3p per mile for battery electric and hydrogen fuel cell cars and 1.5p per mile for plug-in hybrids, rising with CPI inflation from 2029/30.
No. The Government has said it will not mandate telematics. Drivers will estimate and report their mileage, and eVED Connect will be an optional alternative.
The Government is aiming to introduce automated refunds by 2030. It has not yet said how refunds will work before then.
No. It is paid in addition to VED.
