What's the car tax on an EV?

One of the benefits of electric vehicle (EV) ownership is that EVs are exempt from car tax but that’s due to change. From 2025, all cars will be treated the same, here’s what that means if you own an electric car.

What are the car tax rules for EVs from 2025?

The government has announced that from 1 April 2025, electric cars will no longer be exempt from car tax (vehicle excise duty, VED).

It means EV owners will no longer enjoy this tax break and will be subject to the same rules as drivers of petrol and diesel cars.

What are the current rules for car tax?

For petrol and diesel cars, the amount of tax that needs to be paid depends on the age of the vehicle:

Cars registered before 1 March 2001

Car tax is based on engine size. If your car has a 1549cc engine or smaller, the current rate is £180. Cars with larger engines are charged £295.

Cars registered on or after 1 March 2001 but before 1 April 2017

Cars are taxed according to their official CO2 emissions and are grouped into bands A-M accordingly. You can view the full list and current costs at GOV.UK.

Cars registered after 1 April 2017

Cars are charged a first-year rate which is based on the car’s CO2 emissions. After that you’ll be charged a standard rate which is the same for petrol and diesel cars (currently £165). Hybrid cars or other ‘alternatively fuelled vehicles’ pay £155.

What is the expensive car supplement?

This is an extra tax that car owners must pay if their vehicle cost more than £40,000. The supplement is payable for five years, but you only start paying it from year two of ownership.

EVs are currently exempt from this, and it only applies to owners of petrol and diesels that were registered on or after 1 April 2017. However, this is also going to change so if you buy an EV from 1 April 2025 and it costs £40,000 or more, you will also be expected to pay the expensive car supplement which is currently £355.

How much car tax will I be expected to pay for my EV?

From April 2025, EVs will no longer be exempt from car tax. If your car is brand new at the time and is registered on or after 1 April 2025, you will be charged:

  • A first-year rate of £10 in car tax (this is the lowest band of car tax possible)
  • The standard rate from year two onwards
  • If your car costs £40,000 or more you will also need to pay the expensive car supplement for five years, the first payment will be due in the second year (alongside your first standard rate payment)

For example, if you buy a brand-new EV SUV that costs £45,000, you will pay £10 car tax in the first year of ownership. In your second year, you will pay £165 in car tax (the standard rate) plus the £355 expensive car supplement, totalling £520. Remember – you’ll need to pay the expensive car supplement for five years.

Why is the government introducing car tax for EVs?

As EVs increase in popularity, the amount of money raised through car tax gets smaller. Plus, as the government has already outlined a ban on new petrol and diesel cars by 2030, money earned through car tax will decline even further.

Want more information about EVs?

If you’ve driven a petrol or diesel car for as long as you can remember, making the move to an EV can feel like a big decision. To help you explore your options, we’ve put together our electric car hub where you can find information about the cost of buying and insuring an EV. You can also compare the best EVs for families or for your budget.

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