Buying an EV car saves you £1,400 a year and grant can give you £3,750 off – but there's a tax catch
BUYING an EV saves you £1,400 a year and a grant can give you £3,750 off – but there's a tax catch coming in just two years.
The government has launched a new campaign today urging Brits that now is the time to go electric, save up to £1,400 a year and access the UK’s growing 87,000-strong charging network
The launch follows over 50,000 drivers already making the move thanks to the Electric Car Grant, which is providing new EV discounts of up to £3,750, the release says.
But this comes after a new tax for electric vehicles and some hybrid vehicles was announced by the chancellor in the Budget back in November.
From April 2028, electric car drivers will pay a road charge of 3p per mile, while plug-in hybrid drivers will pay 1.5p per mile, with the rates going up each year with inflation.
Aviation, Maritime and Decarbonisation Minister, Keir Mather, said: "Over 50,000 drivers have made savings of up to £3,750 off a new EV and £1,400 a year on running costs. Our campaign is here to show millions of Brits the benefits of making the switch, which could save their family budget thousands.
“With over 87,000 public chargers across the UK and thousands more on the way, our message is clear – going electric has never been easier and under this government, you can save thousands when you do.”
Colin Low, Managing Director at Ipswich-based Kingsfleet, said EVs can offer savings to businesses too.
He added: "Business owners can find serious savings in leasing EVs through their companies. The Benefit in Kind tax rate is currently only 3% of the list price (increasing for the next 7 years) so they are much cheaper than petrol/diesel cars. Having obtained my first EV in 2020, I'm now on my third.
"I have absolutely no intention of returning to petrol/diesel vehicles as a range of 250 miles is ample for 99% of my journeys. Longer trips just need to build in a 'pitstop' along the way and make use of the excellent number of fast chargers along Britain's major routes.
“Whilst the residual values of EVs is still uncertain, leasing one is a way of knowing the cost before you start so that the value when you hand the car back is no longer your issue.”
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, said the coming taxes for EV users is mixed messages.
She continued: "Incentivising EVs still has a role if the aim is to cut air pollution and transport emissions, which remain among the UK’s hardest problems to address. However, the messaging feels mixed when savings and incentives are promoted now while a per-mile road charge for EVs and hybrids is confirmed from 2028.
"That risks people questioning whether switching early is genuinely encouraged or simply a short-term push before 'creative' new taxes are applied. For some, EVs make sense on running costs, charging access, or urban air quality, but they are not a universal solution.
“The bigger issue is policy clarity: people are more likely to change behaviour when long-term costs and rules are predictable. Without consistency, incentives can look less like a transition strategy and more like a temporary sales pitch. Buying a car is a multi-year commitment, and changing incentives, taxes, and rules mid-cycle undermines confidence, leading many to delay rather than risk backing the ‘wrong’ option.”
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said it was worse than mixed messages.
He added: “This isn't just mixed messaging, it’s a classic bait-and-switch. The government dangles a saving today, only to hide the stick of a pay-per-mile tax for 2028. How can working people plan when the goalposts for ownership costs keep moving? You can't incentivise the future while plotting to penalise it."
Rohit continued: "We are heading for a future where we are taxed by the mile by the state. Stop treating drivers like data points to be monetised and start treating them like people who just need to get to work.”
