A survey of 2,000 UK car owners carried out by used car retailer Motorpoint found that 83% of EV owners were unaware that they are likely to have to pay more vehicle excise duty (VED) tax from April 2025.

EVs currently benefit from a road tax exemption, meaning that there is no charge for motorists when taxing their electric vehicles.

From April 2025 onwards this will be changing, and EV owners will be charged up to £620 in road tax, a measure announced in Budget in 2022 under then Conservative chancellor Jeremy Hunt. 

New electric cars will be charged £10 for the first year’s tax, up from £0, while those priced under £40,000 (when new) will be charged £190 per year from the second year.

The most expensive EVs costing over £40,000 will be charged £600 per year from the second year, including the £410 ‘expensive car supplement’. The high average price of EVs means that tens of thousands of drivers will be caught by the top rate. Today, EVs make up around 20% of all cars on the road.

With the changes coming into effect on 1 April, Mike Vousden, Motorpoint’s resident EV expert said: ‘At a simple level, as more car owners make the move to electric, the current exemption means that fewer motorists are paying vehicle excise duty (also known as road tax). So, there’s less tax being collected from motorists. 

‘The government is also losing out on fuel duty as EVs don’t require petrol or diesel, which has tax baked into the price at the pump. The government has predicted that the loss of these two major sources of motor taxation could result in a “£35bn black hole in finances” – making the current system unsustainable.’

How much road tax will EV owners pay? 

‘Understanding the taxation policy for electric vehicles can be quite complicated, but if an EV was first registered before 31 March 2017, motorists will be expected to pay £20 per year,’ explained Vousden. 

‘If it was registered between 1 April 2017 and 31 March, 2025, it will be £195 per year from the start of this April. Anyone planning to buy a new EV after 1 April 2025 will pay £10 in the first year and then £195 – or more – in every subsequent year.’

How can EV owners save £195 over next 12 months?

Vousden has some good advice for EV drivers who are due to renew their road tax in the next six weeks.

‘Motorists might not realise that they can re-tax their car at any time, meaning an EV owner could effectively extend their road tax exemption by 11 months if they were to re-tax in March 2025 – ahead of the rules changing,’ Vousden said. 

‘This means that you’ll be delaying your payment until March 2026 when it will need renewing again – saving yourself £195. It’s undoubtedly a quirk in the system but something for EV owners to consider.

‘Keep in mind that when you re-tax your car, you’ll be charged from the start of the month, so there’s no benefit to waiting until the end of March to renew. In fact, I’d suggest setting a reminder and doing it on 1 March.’

The government wants to stop the sale of new combustion engine cars from 2030 with a target of 2035 for transition to zero emission vehicles. Industry experts and the car industry do not think this is achievable, with an overwhelming majority (80%) of respondents to the Motorpoint survey stating that the government should do more to encourage EV adoption.

Feedback to a recent consultation into the phasing out of sales of new petrol and diesel cars, and ‘demand measures to support the uptake of zero emission vehicles’ are being considered by the Department for Transport.   

The Motorpoint survey of 2,000 UK car owners was conducted by The Leadership Factor in January 2025.