From 1 April 2025, electric vehicles registered after that date will pay Vehicle Excise Duty (VED, commonly called road tax) for the first time. EVs registered before this date got an extra year of grace, but from 1 April 2026, every electric car on UK roads will be paying. Here’s exactly what you’ll be charged, and how it compares to filling your driveway with petrol.
The Standard Rate: £195 From Year Two Onwards
\p>Once your EV is past its first year, you’ll pay the standard rate of £195 per year (that’s about £16.25 a month). This applies whether you’re driving a £26,000 MG4 or a £100,000 Porsche Taycan. At least, it does for the first five years.
Petrol and diesel cars pay the same £195 standard rate, so there’s no penalty here for going electric. The first year is different, based on CO2 emissions, so a new petrol Nissan Qashqai emitting 148g/km would pay £220 in year one, while a new EV pays £10. That’s the only year you’ll feel virtuous about your VED bill.
The Expensive Car Supplement: Where It Gets Painful
Here’s the bit that stings. If your EV had a list price over £40,000 when new, you’ll pay an additional £425 per year on top of the standard rate for five years, starting from the second time the vehicle is taxed. That’s a total of £620 per year, or about £51.67 per month.
This supplement applies to a surprising number of electric cars. The Tesla Model Y Long Range, at £44,990, qualifies. So does the Polestar 2 Long Range Single Motor at £42,950. Even the mid-spec Kia EV6 GT-Line at £47,045 gets caught.
The MG4 Trophy (Extended Range) just squeaks under at £36,995, avoiding the supplement entirely. That £3,005 price difference translates into £2,125 less tax over five years.
Worked Examples: What You’ll Actually Pay
Tesla Model Y Long Range (list price £44,990)
Year 1: £10
Years 2-6: £620 per year (£195 standard + £425 supplement)
Years 7+: £195 per year
Five-year total: £2,490
MG4 SE Standard Range (list price £26,995)
Year 1: £10
Years 2+: £195 per year
Five-year total: £790
Polestar 2 Long Range Single Motor (list price £42,950)
Year 1: £10
Years 2-6: £620 per year
Years 7+: £195 per year
Five-year total: £2,490
For comparison, a petrol BMW 3 Series 320i M Sport (list price £43,970) would pay £220 in year one, then the same £620 for years 2-6, and £195 thereafter. Over five years, that’s £2,700, just £210 more than the Tesla.
The Grey Area: Nearly-New and Used EVs
If you’re buying a used EV, the expensive car supplement still applies based on the original list price, not what you paid. A two-year-old Polestar 2 that cost someone £42,950 new will carry that supplement even if you bought it for £25,000. The supplement applies for five years from the date of first registration, so if you buy a car that’s two years old, you’ll pay it for the remaining three years.
EVs registered before 1 April 2025 never pay VED, regardless of list price. A 2024 Tesla Model S, which would absolutely qualify for the expensive car supplement if registered today, will never pay a penny. This makes pre-April 2025 EVs worth slightly more on the used market, though exactly how much more is still emerging.
How to Avoid the Expensive Car Supplement
The £40,000 threshold is based on the list price, including options and delivery charges, but before any discounts or salary sacrifice arrangements. If you’re buying through a company car scheme, your personal cost might be £30,000 after tax benefits, but if the list price was £42,000, you’re still paying the supplement.
Your practical options: choose a trim level or model that comes in under £40,000, negotiate a reduction in the official list price rather than a post-sale discount (difficult but not impossible), or accept that £2,125 over five years is about £35 per month, which is less than most people spend on coffee.
At the time of writing, these VED rates are set for 2025/26. The government typically adjusts them annually, so it’s worth checking GOV.UK or your vehicle’s log book reminder when your renewal comes up. But if you’re budgeting for an EV purchase, add £195 per year as a baseline, and £620 per year if you’re looking at anything over £40,000 list price.