Road tax on electric cars: what you need to know

Do electric cars pay road tax? It’s an important question for anyone looking to make the switch to an EV.

Until recently this question was simple to answer: “No.” There are now tax changes on the horizon which mean that answer changes to “Not yet, but soon.”

Confused? Let us explain all about road tax, and how tax changes are about to affect electric car owners.

What is Road Tax?

Let’s get a pedantic point out of the way – road tax isn’t really road tax at all, it’s Vehicle Excise Duty (VED). The revenue from VED isn’t ringfenced to pay for roadbuilding and repairs, so to call it road tax is kind of misleading.

Instead, ‘road tax’ (as almost everyone calls it) is paid by most car owners as a revenue-raiser for the government, but also as a means of influencing drivers to choose low-emission cars.

How is road tax calculated?

When a car is first registered, 12 months of road tax is included in the on-the-road charges. How much you pay depends on how much carbon dioxide (CO2) a car emits. The more CO2 it pumps out, the higher the first-year charge.

At the moment the first-year road tax on electric cars costs nothing. The same applies to very efficient hybrids emitting 1-50g/km of CO2.

A slightly less efficient hybrid emitting 51-75g/km of CO2 is taxed at £20. At the opposite end of the scale a petrol or diesel car emitting over 255g/km is taxed at £2,745.

After a year on the road the owner must pay again. This time the bill isn’t based on CO2 emissions, but the type of engine a car has. There’s one rate for alternative-fuel vehicles, one for petrol and diesel cars meeting the latest emissions standards, and another for older diesels that aren’t as clean as today’s models. Again, road tax on electric cars doesn’t cost anything, although that’s soon to change.

The standard rate for non-electric cars in 2024-25 is £190. Hybrids and other alternatively fuelled vehicles have a £10 discount.
Most vehicles with a list price of over £40,000 attracts a tax surcharge for five years once the first 12 months of road tax expires. For now, battery electric cars are exempt.

This all applies to cars registered since April 2017. Different rates apply to older cars, with carbon dioxide emissions being key to the cost for cars registered between March 2001 and April 2017.

Do you pay road tax on electric cars?

No, at least not yet. Whether you are buying a new electric car or taxing an electric car that’s already on the road, there’s no road tax to pay.

The thinking is to encourage buyers to choose electric cars. As there’s no road tax cost, owners make a saving compared with running a petrol, diesel, or hybrid.

There are also big savings for anyone running an EV as a company car.

What will the road tax for electric cars be in 2025?

From April 2025, road tax will apply to electric cars. Here’s what you need to know, and how much road tax will cost:

• The first year of road tax for electric vehicles will cost the same as for conventional cars emitting 1-50g/km of CO2 (currently £10, but subject to change).
• From the second year, electric vehicles will pay the standard road tax rate (currently £190).
• Any electric car first registered between 1 April 2017 and 31 March 2025 will also pay road tax at the standard rate (currently £190).
• Electric cars will no longer be exempt from the extra road tax charge for cars costing over £40,000. This currently adds £410 per annum from the start of the second year on the road for the following five years.
• Electric cars first registered from 1 March 2001 to 31 March 2017 will pay road tax in Band B (currently £20 per year).
• Hybrids and other alternative-fuel cars will no longer receive the £10 discount on the standard rate of car tax.

Road tax on electric cars FAQs

Do you pay road tax on electric cars over £40,000?

Not yet. Electric vehicles are exempt from the extra charge. That will no longer be the case from April 2025, when electric car owners will have to pay the extra £410. That’s the current rate and could change between now and April.

How much is road tax on an electric car?

For now, it costs nothing. There’s no road tax cost for an electric car when it first registered, or in subsequent years.

That comes to an end from April 2025. The first-year rate for electric cars will be the same as for cars emitting 1-50g/km of CO2. At today’s rates, that’s £10. The regular annual road tax payments will jump from nothing to £190.

Do hybrid cars need to pay road tax?

Yes, hybrid car owners pay road tax. How much depends on the car’s emissions and when it was first registered.

The exception is when a very low emissions hybrid is brand new. Buy a hybrid car with emissions of 1-50g/km and the first-year cost is zero. For hybrids emitting 51-75g/km road tax costs £20, for those emitting 76-90g/km that climbs to £125.

From the car’s first birthday onwards, hybrids pay £180 per year, a £10 discount on the rate for a regular petrol or diesel car. From April 2025, that discount ends and hybrids will pay the same standard rate as other cars.

There’s an extra £410 each year for five years on top of the standard rate for cars costing over £40,000 when new. It applies to hybrid cars as well as petrol and diesels.

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Head over to our EV deals page where you can find the latest models at attractive prices, while if you have an existing car you’d like to find a new home for, our Sell My Car service will see dealers bid on your motor, leaving you to simply pick the best offer.