What the 2025 Autumn Budget means for motorists
Luxury car tax, pay-per-mile, EV public chargers: how does the Autumn Budget impact drivers?
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Autumn Budget 2025 - how it impacts drivers
The Autumn Budget was announced on Wednesday 26 November 2025 - and there's some big news for motorists.
Chancellor Rachel Reeves announced changes for electric vehicle (EV) owners and those looking to buy an EV, as well as updates for luxury cars, the Motability Scheme and a new 'fuel finder' tool.
Read below for the full list of highlights and things to be aware of.
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Autumn Budget updates for electric car owners
In summary:
A 'pay-per-mile' tax will be introduced for electric and hybrid cars from April 2028
The expensive car supplement threshold will increase to £50,000 for EVs from April 2026, up from the current £40,000
An extra £1.3 billion will be put towards the Electric Car Grant scheme, extending it to 2030
Electric charging infrastructure across the UK will receive an extra £200 million of funding
Pay-per-mile
The big update for EV drivers is the mileage-based charge on battery-electric or plug-in hybrid cars (also known as the 'pay-per-mile' charge).
EV drivers will need to pay 3p per mile, and hybrid drivers 1.5p per mile, from 2028 to 2029. After that, the tax is likely to increase each year.
Abhishek Sampat, our Head of Electric Vehicles, said:
"The introduction of a mileage-based charge from 2028 will affect millions of drivers and understandably raises questions about the long-term running costs of electric vehicles.
"The way this is implemented will be crucial to ensuring drivers feel the system is fair and transparent, particularly for those already making the shift towards cleaner, lower-emission driving.
Expensive car supplement threshold increase for EVs
The expensive car supplement is an additional tax payable from the second to the sixth year a car worth over £40,000 is on the road. It costs an additional £440 each year, on top of standard rate road tax.
The threshold for electric cars is set to increase from April 2026 to £50,000 in response to the disproportionate number of EVs liable for the extra tax.
Electric Car Grant
The Electric Car Grant offers discounts of up to £3,750 off new electric cars, depending on certain criteria, such as costing less than £37,000, and is being extended.
The Chancellor announced that an additional £1.3 billion will be put towards the scheme, extending it until 2030, meaning more drivers can take advantage of the savings.
Find a full list of cars eligible for the Electric Car Grant.
Electric car charging
A further £200 million has been committed to EV charging to help the UK meet its target of 300,000 chargepoints by 2030. This also applies to work and home chargers, improving the charging infrastructure across the country.
Abhichek said: "The additional £200m committed to expanding EV charging infrastructure is another practical step forward, particularly for drivers who rely on public or on-street charging.
"Greater reliability and availability of local charging gives people confidence that going electric won’t make everyday life harder, which is especially important for drivers without a driveway."
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The Motability Scheme
The Motability Scheme enables drivers with disabilities to use their Personal Independence Payment (PIP) allowance towards the cost of a car.
'Luxury' cars from brands such as BMW and Mercedes will no longer be available on the scheme, with the aim of increasing the number of UK-made cars leased through Motability. Many of these cars have already been removed from the eligible car list.
Other changes to the scheme include removing VAT relief on advance payments and applying Insurance Premium Tax (IPT) to cover provided through the scheme. These changes will come into effect from 1 July 2026.
Lease mileage limits will also be decreased, and overseas breakdown cover will be cut.
Fuel duty frozen & new 'fuel finder' tool
The Chancellor shared that fuel duty will remain frozen until September 2026.
From that point, the 5p per litre discount will be reversed. As of April 2027, fuel duty will increase in line with inflation.
UK motorists will be able to use a new 'fuel finder' regulation that aims to make it easier to find the cheapest fuel nearby. All petrol stations will have to share current pricing, so motorists can find the most cost-efficient place to fill up.
Any price changes will need to be reported within 30 minutes, and this data will be offered to any third party that wants to use it.
Expect sat navs, online maps and apps to take advantage.