EV street tax exemption to cease in April 2025


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Vehicle Excise Duty (VED) is a tax levied on automobiles on UK roads. At current, electrical automobiles (EVs) are exempt.

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Founder of ChooseMyCar.com, Nick Zapolski, mentioned that the brand new “Tesla Tax”, as he calls it, might put many individuals off shopping for an EV, and that it might spark issues that the advantages of EV possession might be eroded over time.

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“While our analysis suggests individuals are eager about EV possession, it’s simple that the excessive buy value of recent EVs – and the shortage of second-hand ones available on the market – imply it’s out of attain for a lot of drivers. Any new tax on them would simply exacerbate this case – and may very well be seen as a sign that different advantages of EV possession are underneath menace.

“This new “Tesla tax” signifies that some folks will now be paying extra for his or her street tax than somebody in an outdated banger, which isn’t in step with the Government’s inexperienced credentials.

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“While we appreciate that the higher amount of EV drivers means a drop in road tax revenue for the government, this seems a huge step up and is a concerning sign as to what may lay ahead.”

However, David Lewis, Head of Electric Vehicles & Energy at Select Car Leasing described the transfer as ‘disappointing – but inevitable’.

He added: “It was at all times inevitable that EV house owners would at some point should pay automobile excise obligation or an identical tax so this doesn’t come as an excellent shock.

“Road tax generates billions for the Treasury annually – and as increasingly more folks transfer to EVs, that’s a big fiscal hole to plug. In my view EV street tax has been introduced in a minimum of two, three years forward of time, as a response to a difficult monetary outlook.

“And whereas that’s disappointing on the face of it – and an embarrassing announcement to make throughout COP 27 – I don’t finally see this as being a ‘deal-breaker’ for these seeking to get behind the wheel of an EV.

“The first year VED for zero-emission cars from 2025 will be set at the lowest rate – £10 – before moving to the standard rate of £165 a year.”


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