Road Tax on Electric Cars Explained


Road Tax on Electric Cars Explained

Low emission vehicles


Fully Electric cars or (BEVs Battery Electric vehicles) are exempt from Vehicle Excise Duty or Road Tax. The obvious reason being to reward and encourage the use of cleaner and environmentally friendly methods of transport. (PHEVs) Plug-in hybrids also attract favourable lower rates of duty.

NB: As from April 2017 any electric vehicle both BEVs and PHEV’s costing £40,000or more have to pay an annual supplement for the the first 5 years.

NB: All electric cars still need to be taxed each year in the normal way, even though exempt – this is done online or the post office.


How much is electric car road tax and how is it calculated ?

  • Road tax or Vehicle Excise Duty is base on
  • CO2 tailpipe emissions of the car
  • Cars list sales price
  • Year Car was registered

Key Points:

Pure battery electric vehicles (BEVs) are exempt from VED

Plug-in hybrid electric vehicles (PHEVs) pay reduced VED

Any vehicle (including BEVs) with a list price of £40,000 or above will incur an additional
premium rate for the first 5 years


Looking to the future

So, currently pure-electric vehicles currently enjoy tax-exempt status (if they costbelow £40,000). The obvious question is how long the government can afford tocontinue this, especially as more and more electric cars take to the road and essential£28 billion pounds of revenue is lost.

A number of predictions have been made, one that seems sensible is for cars to payduty based on the amount of miles they travel annually. The car owner would simplypay for each mile driven. No decision has been made by the government who areinvestigating all options for replecing fuel duty.

We will keep you posted !

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