Electric Car VED Road Tax from 2025

electric car ved road tax 2025

On the 21/11/2022 the government announced that it will bring in a new car road tax for electric vehicles.

The new VED car road tax will apply to electric cars, vans and motorcycles of both privately owned and company vehicles.

In the Autumn statement 2022 the government stated that the electric car VED change is being made to ensure a fairer car road tax system with no exemption or reduction for having an electric vehicle.

The change will apply to any electric car with a different car road tax rate being applied depending on the date of your cars first registration.

Currently electric cars enjoy a zero car road tax rating and hybrids a reduced road tax rate. The proposal means that the current exemptions will be scrapped from April 2025 and the new road tax revenue used to help the further transition to electric vehicles.

It’s a good idea to know about the electric car road tax increase now so you can include the cost in any of your future personal car or company car related budgets.

How much will the electric car road tax be?

A fully electric car first registered on or after the 1 April 2017 will qualify for the lowest first year rate which is set at £10 per year.

After the first year of registration electric cars will then pay the standard annual VED rate which is considerably more.

The standard car road tax rate is at the time of writing £165.

By the time the electric car road tax change is implemented in 2025 the lowest first year and standard car road tax rates may be higher.

Electric car expensive car supplement 

The expensive car exemption for electric cars will also end in April 2025 meaning truckloads of electric cars will meet criteria for the expensive car supplement of £355 after their first year of registration.

An expensive car supplement will come in to play for electric cars registered from 1 April 2025 and it will be charged from the second year of registration for a period of five years only.

The government classify an expensive car with a list price of more than £40,000 and the supplement will be on top of the VED road tax.

What about electric van road tax?

The vast majority of electric vans will be transferred into the standard annual rate for petrol and diesel light good vehicles. The move will involve company vans and not just privately owned electric vans.

What about Hybrid car road tax?

Hybrid car road tax and other alternatively fuelled vehicles will lose their current £10 discount in April 2025.

Hybrids and AFW’s will be subject to the same VED as the equivalent petrol or diesel car.

What about electric motorbike road tax?

Electric motorbikes and tricycles will be moved into the VED annual rate for the smallest engine size.

Electric company car tax

The company car tax charge for electric company cars is not included in the proposals for VED. Electric company car tax is currently set at 2% with a projected rise to 5% by 2028.

Electric car road tax government income

It is expected to bring in an estimated road tax revenue increase of 515 million in the first year of introduction going up to £985 million and £1595 million respectively in the following two years.

The new electric car road tax revenue will be partly used to balance a loss of income from petrol and diesel cars which are gradually being phased out of production.


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