How much will electric car tax be in 2025?
Understanding electric car tax changes and how much you’ll need to pay
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If you’ve got your eye on an electric vehicle (EV) or already own one, you might be wondering, ‘How much will car tax be in 2025?’.
Free road tax for EVs was a big draw for switching to battery power in recent years, but we now know that electric-powered vehicles will no longer be exempt from paying tax come April 2025.
That means EV owners will have to pay car tax going forward, as well as the extra luxury car tax if required.
Read our guide to electric car road tax in 2025 below to get the details.
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How does electric car tax work now?
Electric car tax from 2025 will work the same as any other car on the road.
You’ll need to go through the standard process of taxing your electric car. But now, instead of getting it for free, you'll make a one-off payment for six or 12 months of tax, or pay via monthly Direct Debit.
You can still do this on the vehicle tax website, at a Post Office, or by phone.
There are no changes to the process of switching the tax to a new owner when you buy or sell your electric car (apart from that the new owner now needs to pay) or registering it off the road (SORN).
Some drivers are exempt from road tax, such as those with disabilities, and it’s likely these exemptions will still apply – depending on what the UK government announces as the change gets nearer.
How much electric car tax will be in 2025
As of August 2024, electric car tax is set to increase to the standard rate car tax in April 2025, which is as follows:
First year: the lowest first-year rate of vehicle tax of £10
Second year onwards: £190 standard rate (subject to change before 2025)
Luxury car fee (for cars that cost over £40,000 new): £410 per year from the second year, for five years
The standard rate, or any of the fees, could change as the new guidelines are rolled out. It’s always best to check your specific vehicle’s road tax band to get accurate rates at that time, especially before you buy a new car.
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Changes to electric car road tax
The government has announced that EV drivers will now have to pay £190 per year to tax their cars, with a lower rate for the first year’s tax.
This is the same as the current standard rate road tax for petrol and diesel vehicles – with hybrid cars currently (as of August 2024) getting a £10 discount.
Changes to EV luxury car tax
EV drivers will also need to pay the £410 ‘luxury car tax’ (aka ‘expensive car supplement’) for vehicles that were worth £40,000 brand-new.
Previously, only traditional petrol, diesel and hybrid cars had to pay this fee.
This fee is paid from the second year until the sixth year of a car being registered, which is the same as petrol, diesel and hybrid cars.
What this means for some electric car drivers
These electric car tax 2025 changes mean that running your car will now be more expensive, especially if you go for a model with a list price of over £40,000 when brand-new.
As a whole, EV driving is still set to be cheaper than living with a petrol or diesel car.
Fuel costs across the UK have been yo-yoing for a while after reaching their highest prices ever in the Summer of 2022.
The price for petrol was as high as 191.5p for a litre but seems to be sticking around 145p per litre for now.
For example, the Ford Focus has a 52-litre petrol tank, so you're looking at about £75 for a full tank if we base it on 145p a litre.
For electric car charging, you’ll typically be looking at about 24.5p per kWh – about £15 to charge a car with a 60kWh battery.
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Electric cars exempt from luxury car tax
The best way to grab an electric car with low road tax is to choose a model that costs less than £40,000 to buy brand-new and avoid the £410 luxury car tax.
For something spacious, the Kia e-Niro is under £40,000 if you don’t rack up the optional extras. There’s also the Skoda Enyaq, BMW iX1, and IONIQ 5 to consider.
If you fancy a smaller car, the Mini Electric, smart fortwo, and Volkswagen ID.3 all fit the bill.
Just keep in mind that even if the base price is below £40,000, added options can take it over that magic number, and you’ll have to pay the luxury car tax.
For example, the VW ID.3 starts at £35,700 brand-new, but the Pro S Match trim can go up from £40,050.
Be aware of this when buying a used electric car as well. You could be buying a car that cost more than £40,000 new if you don’t account for trim levels and optional extras.
Electric cars that have to pay luxury car tax
Just so you don't get caught out, it's worth noting that there are a couple of popular EVs out there that will have to pay luxury car tax come December 2025.
Popular luxury cars like the Porsche Taycan and Ford Mustang Mach-E cost comfortably over £40,000 new, so you'll need to pay the luxury car tax until they're six years old.
There's also the popular BMW i4 and i5 - costing from £62,590 and £67,695 respectively when new.
Other ways to save with an electric car
There are a few other ways you can save money with an electric car, such as:
Making use of free charging points (e.g. your workplace or some supermarkets) – these are likely to become rarer as EVs gain popularity, so enjoy while you can!
Find an EV electricity tariff – some electricity providers have tariffs specifically for EV owners to help keep charging costs low
EV maintenance – electric car maintenance is typically cheaper than for petrol or diesel cars as they have fewer moving parts to service or repair
Consider the battery warranty – plenty of EV batteries come with an extra-long warranty (like the eight-year/100,000-mile warranty with the Nissan Leaf)
ULEZ exemptions – EVs are still set to be exempt from paying ULEZ charges until 25 December 2025
Explore electric cars at cinch
So, the EV road tax 2025 changes are a bit annoying but not set to ruin all the benefits of living with an electric car.
They’ll still be cheap to run, better for the environment, and really enjoyable to drive.
You can also keep costs low by being mindful of your charging and the model you choose.
If you want to get ahead and enjoy some months of free EV road tax before the 2025 changes, take a look at our full range of used electric cars to buy now.
Even after that, EV life will still be cost-effective and smooth sailing.