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Andy Harris
Motoring and Property Editor
@ytimesmotoring
1:00 AM 29th November 2025
cars

Electric Cars – A Budget Special Report

This government, like its predecessor, says it wants to actively encourage motorists to switch to electric cars. The choice is now wider than ever, and prices are coming down. There are now EVs available to buy from less than £20,000. With another £10,000 available to spend, the choice is huge, with plenty of family-sized vehicles on sale.

This week’s budget has clearly sent out mixed messages. On the one hand, the ‘Expensive Car Supplement’ has been raised from £40,000 to £50,000, meaning that most EVs will avoid the higher vehicle tax payment, which adds £425 a year on top of the mandated £195.

However, as everyone will have read by now, and making all the headlines, is the planned introduction of a new pay-per-mile eVED (Electric Vehicle Excise Duty). Under the new rules, electric car drivers will pay 3p per mile, while those with a plug-in hybrid vehicle will pay 1.5p per mile.

In the greater scheme of things, the charges will be relatively modest. Drive 10,000 miles a year in your EV, and you will be expected to pay £300. The government clearly wants to recoup the lost revenue that it gets from fuel duty, to bolster its coffers.

What the announcement of this measure has done, I suspect, is to put off many drivers who were unsure as to whether now was the time to make the switch to greener motoring. What also doesn’t help is that whilst public charging for electric cars is getting easier in most areas, the cost for a quick charge is excessive. You can easily find yourself paying up to 89p per kWh, whilst those able to charge at home can do so for a fraction of the cost.

The proposed pay-per-mile charge will adversely affect the rural motorist, as many have to travel greater distances to work or to access essential services.

There is also the fear that once charges are introduced for miles travelled, it will be easy for successive governments to increase them at will.

One last point on the subject: there doesn’t yet seem to be a clear plan as to how the charges will be collected and the mileage monitored. The day after the Budget, the Chancellor said MOT testing would be the way forward until it was pointed out to her that only cars over three years old need to be tested.

I’ve also heard that drivers will be expected to estimate their annual mileage in advance and pay up, with extra payment or refunds then made at year end. The tax is not scheduled to be introduced until April 2028, so there is time aplenty to put a workable system in place.

I personally believe the timing of this announcement has generated unnecessary negative publicity about EV adoption and may well encourage many drivers to hold fire on making the move. Time will tell.

In other budget news, fuel duty remains frozen, and BIK (Benefit In Kind) rates for company car drivers continue to rise gradually. The much-publicised Motability Scheme gets a revamp too. Top-end brands, such as Mercedes-Benz, Audi, and BMW, are set to be removed from the list of available vehicles.

The scheme provides a vital service from some 850,000 disabled motorists in the UK. The program enhances freedom and independence for disabled drivers. The major overhaul will also see all coupe and convertible cars banished from the lists. The changes will come into effect almost immediately.

The Motability Scheme was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz. So I am making reforms which will reduce generous taxpayer subsidies, and Motability has confirmed they will remove luxury vehicles from their scheme, getting the scheme back to its original purpose of offering cost effective leases to disabled people.
The Chancellor, Rachel Reeves MP