From 1 April 2025, electric vehicles registered on or after that date will pay £195 per year in Vehicle Excise Duty (VED, or road tax). It’s the end of the free ride that made EVs particularly attractive for anyone trying to do the maths on total ownership costs.
But the actual impact depends entirely on when you buy, how much your car costs, and whether you qualify for exemptions most people don’t know exist.
The Three-Year Cost Difference
If you register an EV before 1 April 2025, you’ll pay £0 in road tax for as long as you own it. Over three years of ownership, that’s £0.
Register the same car on 1 April 2025 or later, and you’ll pay the new standard rate. In the first year, you’ll pay nothing (all new cars get the first year free, based on CO2 emissions, and EVs emit zero). Years two and three cost £195 each. Total over three years: £390.
That’s £390, or about £10.80 per month if you spread it across the three years. Not trivial, but hardly a deal-breaker when you’re already saving substantially on fuel and, if it’s a company car, benefiting from the 2% Benefit-in-Kind rate.
The Expensive Car Supplement Trap
Here’s where it gets more painful. Any car with a list price over £40,000 pays an additional £425 per year for five years, starting from the second year of registration. This is the expensive car supplement, and it applies regardless of fuel type.
Previously, EVs were exempt from this supplement. From April 2025, that exemption disappears.
Take a Tesla Model Y Long Range, with a list price of around £51,990 at the time of writing. Register it before April 2025: you pay £0 over three years. Register it from April 2025 onwards: you pay £1,240 over three years (£0 in year one, then £620 in years two and three, made up of the £195 standard rate plus the £425 supplement).
A Volkswagen ID.4 in a higher trim that tips over £40,000 faces exactly the same additional cost. It’s £1,240 over three years, or about £34.45 per month.
The supplement applies for five years in total, so if you’re doing the full five-year calculation on a Model Y registered from April 2025, you’re looking at £2,320 in road tax (year one free, then five years at £620, but you only pay the supplement for years two through six, so that’s £195 in year six).
Who Doesn’t Have to Pay
There are exemptions, though they apply to a small minority of drivers.
Disabled drivers who receive the higher rate mobility component of Disability Living Allowance, the enhanced rate mobility component of Personal Independence Payment, or Armed Forces Independence Payment are exempt from VED. This applies regardless of the vehicle type or list price.
Vehicles used by a disabled person, where the vehicle is registered in their name, also qualify for exemption if the person in question receives one of the above benefits. You’ll need to apply using the relevant DVLA forms, and the exemption lasts as long as eligibility continues.
Historic vehicles, defined as any vehicle manufactured more than 40 years ago, are also exempt. This won’t apply to many EVs yet, given how recently mass-market models arrived, but early adopters with a 1985 Sinclair C5 can rest easy. More realistically, as the first Nissan Leafs approach their fifteenth birthday, this exemption will start to matter in another 25 years.
Should You Rush to Buy Before April?
If you were already planning to buy an EV in the next few months and the model you want is in stock, registering before 1 April 2025 will save you either £390 or £1,240 over three years, depending on list price.
But don’t buy a car you don’t want, or pay over the odds for one with the wrong spec, just to save what amounts to between £10 and £35 per month. Dealers know the deadline exists, and any attempt to inflate prices or reduce discounts to capture that saving will quickly erode the benefit.
If you’re salary sacrificing through your employer, the road tax cost will typically be rolled into your monthly lease payment anyway, so you won’t be paying it directly out of taxed income. The impact is real, but it’s dulled by the tax relief on the whole package.
One genuinely useful move: if you’re considering a model that sits just over the £40,000 threshold, check whether a slightly lower trim or fewer options would bring you under it. Saving £1,275 over five years (that’s the expensive car supplement at £425 per year for five years) by spending £1,500 less on spec you didn’t really need is a straightforward win.