The number of electric vehicles on the road has risen rapidly thanks to various incentives, but the Autumn Budget contained considerable changes for this group of road users.
The Chancellor’s speech and accompanying red book sets a clearer long-term framework for electric vehicles, balancing new charges with wider financial support and incentives.
From April 2028, a new Electric Vehicle Excise Duty will introduce a per-mile charge for electric and plug-in hybrid cars, to be paid alongside existing Vehicle Excise Duty.
Electric cars will pay half the fuel duty equivalent (around 3p per mile), while plug-in hybrids will pay half of that rate again. The detailed design is now out for consultation until March 2026.
Alongside this new charge, the Government is expanding support for the sector. An extra £200 million is being invested in charging infrastructure, split between a new local authority fund for residential and workplace chargepoints and a further allocation for home and business charging.
A 10-year business rates exemption will also apply to eligible charging points and electric-only forecourts, reducing costs for operators.
In a significant move for buyers, the threshold for the Vehicle Excise Duty Expensive Car Supplement will rise to £50,000 for zero-emission vehicles.
This will apply to cars registered from April 2025 and will come into effect from April 2026.
The Electric Car Grant is also being strengthened, with an additional one point £3 billion of funding and an extension to 2029-30.
There are updates to company car taxation too. Plans to bring employee car ownership schemes into the Benefit in Kind rules have been delayed until April 2030, with transitional arrangements running until 2031. First-year capital allowances for zero-emission vehicles and charging equipment have been extended to 2027.
Plug-in hybrids will also benefit from a temporary Benefit in Kind tax easement until April 2028, preventing sharp increases as new emissions standards come into force.
For those not ready or able to make the move to zero-emission vehicles, the Government confirmed that the current 5p cut to fuel duty will remain in place up until the beginning of September 2026.