Electric vehicles registered from 1 April 2025 onwards will pay Vehicle Excise Duty (VED, also known as road tax) for the first time. If you bought your EV before that date, nothing changes. You still pay nothing. But if you’re buying new from April onwards, here’s what you’ll actually be writing cheques for.
The Basic Structure: Three Different Rates
VED works differently depending on how long you’ve owned the car. There are three rates that matter: the first year rate (based on CO2 emissions), the standard rate from year two onwards, and an additional expensive car supplement if your EV cost £40,000 or more when new.
For EVs, the first year rate is £10. That’s because electric vehicles produce zero tailpipe emissions, and the first year rate is tied to CO2 output. It’s essentially a token amount, likely just to get EVs into the system.
From year two onwards, you’ll pay the standard rate, which is £195 per year at the time of writing. This is the same amount that petrol and diesel cars pay from their second year, regardless of emissions. Think of it as about £16 per month.
The Expensive Car Supplement Trap
Here’s where it gets costly. If your EV had a list price of £40,000 or more when new, you’ll pay an additional £425 per year on top of the standard rate. This supplement kicks in from year two and lasts for five years (years two through six of ownership). After year six, it drops off and you’re back to just the standard rate.
The list price is the official price when the car was new, including any factory-fitted options and VAT. It doesn’t matter what you actually paid. Got a great discount? Bought it second-hand? Doesn’t matter. The supplement is based on the original list price.
That £40,000 threshold catches more EVs than you might think. A base Cupra Born starts just under at £39,995, but add metallic paint and you’re over. The Kia EV6 starts around £45,000. A Tesla Model Y Long Range is over £50,000. Even the MG4 Trophy trim can nudge close to £40,000 with options.
What You’ll Actually Pay: Real Examples
Let’s look at two scenarios with cars registered in April 2025.
Example 1: MG4 SE (list price around £28,000)
Year 1: £10
Years 2-6: £195 per year (total £975 over five years)
Year 7 onwards: £195 per year
Total VED over first six years: £1,185, or about £16.50 per month averaged out.
Example 2: Tesla Model Y Long Range (list price around £52,000)
Year 1: £10
Years 2-6: £620 per year (£195 standard rate plus £425 expensive car supplement, total £3,100 over five years)
Year 7 onwards: £195 per year
Total VED over first six years: £3,110, or about £43 per month averaged out.
That’s a £1,925 difference over six years purely because of the expensive car supplement.
When and How You’ll Pay
\p>You’ll pay your VED when you tax the car, which you need to do before driving it on public roads. You can pay annually, every six months (with a small surcharge), or monthly by Direct Debit (with a 5% surcharge). The monthly option spreads the cost but works out slightly more expensive overall.
The DVLA will send you a reminder when your VED is due for renewal, but it’s your responsibility to make sure it’s paid. You can tax your car online at gov.uk, by phone, or at a Post Office.
What This Means for Your Next Purchase
If you’re buying an EV soon and haven’t yet ordered, registering it before 1 April 2025 means you’ll pay zero VED for as long as you own it. That’s a saving of at least £1,185 over six years, or £3,110 if the car costs over £40,000.
If you’re buying after April 2025, the expensive car supplement becomes a genuine consideration. The difference between a £39,500 car and a £40,500 car isn’t just the £1,000 purchase price. It’s an additional £2,125 in VED over the following five years (£425 per year times five). That might be enough to make you think twice about adding that panoramic roof or bigger battery if it pushes you over the threshold.
Check the exact list price, including your chosen options, before you order. Your dealer should be able to confirm this, and it’ll appear on the V5C registration document when the car is registered. If you’re buying used, the list price when new still applies, so ask the seller or check the V5C if you’re considering a car that might be close to £40,000.