The UK will impose a pay-per-mile tax on EVs and plug-in hybrids starting April 2028

The UK government just confirmed it’s going after EV drivers’ wallets. Starting April 2028, electric vehicle and plug-in hybrid owners will pay a per-mile tax under new budget plans aimed at closing a future revenue gap.

The Office for Budget Responsibility expects the change to erase about 440,000 EV sales over time, as fully electric car drivers will be charged 3 pence per mile, while plug-in hybrid owners will pay 1.5 pence.

The annual hit will stack up. By 2028–2029, someone driving a typical 8,500 miles a year in an EV will owe around £255. That’s projected to bring in £1.4 billion by the end of the decade.

This entire move is meant to replace lost fuel duty, which continues to shrink as drivers ditch combustion engines. And yes, fuel tax stays frozen for another year.

Carmakers react as EV sales mandate collides with new tax

The response from automakers has been blunt. Lisa Brankin, UK chair of Ford, said, “This is the wrong tax at the wrong time,” and added that it “sends a confusing message at a critical moment in the EV transition.”

Companies like Ford are already under pressure to meet rising EV sales quotas or risk government fines. And even that policy got softened earlier this year to give them more breathing room.

Mike Hawes, who runs the Society of Motor Manufacturers and Traders, pointed out that the government’s own fiscal watchdog warned the tax could “undermine demand.”

He called on leaders to “work with industry to reduce the cost of compliance and protect the UK’s investment appeal.” That’s not exactly a vote of confidence.

Charging network bosses aren’t thrilled either. Delvin Lane, CEO of InstaVolt, said, “Introducing such a system at this stage risks putting off drivers who are considering making the switch to electric by layering on new costs.”

EV growth in Europe outpaces UK’s flatline

While UK drivers face new bills, Europe’s EV market kept growing. October car sales across the continent rose 4.9% year-on-year to 1.09 million units, with countries like Spain and Germany leading the gains.

Meanwhile, the UK and Italy stalled. One reason Europe is pulling ahead? More affordable electric models are hitting the streets.

Plug-in hybrid sales in Europe jumped 40% last month. Fully electric cars weren’t far behind, rising nearly a third. People are buying cheaper EVs like the Citroën ë-C3 from Stellantis, but carmakers are still running into slow uptake.

Volkswagen and Stellantis both scaled back production in some plants after weaker-than-expected sales and a few profit warnings. Even Porsche is easing off its electric rollout.

Sales leaders in October included Renault, up 11%, and strong growth from Volkswagen Group and BMW.

But the most aggressive push came from BYD. The Chinese automaker more than tripled its sales in Europe and easily overtook Tesla, whose regional registrations fell 48%.

Meanwhile, in the UK, ministers extended the car grant by £1.3 billion and set aside another £200 million for charging infrastructure.

But with 440,000 fewer EVs now expected to hit UK roads, the bigger question is whether drivers will stick with electric or keep their distance.

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