Road tax on electric cars

How is road tax calculated on EVs?

Road Tax (VED) is based on the CO2 emissions a vehicle releases from its tailpipe (on vehicles registered since March 2001). VED takes into account the vehicle’s list price and the year it was registered, too. EVs benefit financially from minimised emissions.

If any road tax is required for your electric car lease, it'll normally be included with your deal, although you should check with your provider.

Do you pay road tax on electric vehicles?

EVs benefit financially, because of their minimised, or absent, CO2 emissions. Battery-powered Electric Vehicles (BEVs) are exempt because they’re zero-emissions. Plug-in Hybrids (PHEVs) pay a reduced VED. PHEVs worth £40,000+ pay an annual supplement (for the five years from the second time it's taxed).

Battery electric vehicles (BEVs)

Since April of 2020, BEVs (which are zero-emission EVs) do not pay any road tax, in both the first year and in all subsequent years - whatever their list price.

Hybrid electric vehicles (HEVs)

Hybrids tend to have minimised emissions. Some HEVs (and PHEVs) are ultra-low emissions vehicles (ULEV). That means they produce less than 75g/km of CO2. Cars producing 0g/km of CO2 emissions (ie BEVs) pay no VED, where cars between 1-50g/km of CO2 pay £140 (with a premium supplement of £325 if the vehicle was bought for over £40,000).

Owners of hybrids registered since 1st April 2017 are eligible for a £10 discount (Road Tax, therefore, equating to £130 rather than £140). An additional Premium fee must be paid on vehicles bought for £40,000 or more. That equates to an extra £310 annually, for the first five times they tax the car - equating, overall, to a VED of £440 for many hybrids.

Hybrid Model:List Price:VED 2020/2021:
Hyundai Ioniq £23,840 £140 (first year: £145)
Honda CR-V £29,105 £150 (first year: £540)
Lexus RX £48,422 £465 (first year £0)

Plug-in hybrids (PHEVs)

PHEVs will pay somewhere between £0-£100 VED for the first year of ownership. That depends on their CO2 emissions and spans from £0 - £145. After that, they’ll pay £140 each year. Cars worth over £40,000 pay a premium car supplement of £325.

PHEV Model:List Price: VED 2020/2021:
Audi Q5 TFSI-e £50,410 £465 (first year £15)
Volvo XC90 Recharge T8 £68,025 £465 (first year £15)
Skoda Superb iV Estate £25,800 £140 (first year £0)

Electric vehicles over £40,000

Cars bought for £40,000 or more must pay an additional Premium fee. That equates to an extra £310 annually, for the first five times that you will tax the car.

Will road tax change for electric cars in 2021?

VED costs are bound to rise, as the government seeks to offer a stronger incentive for the population to drive more eco-friendly vehicles, as part of the Road to Zero initiative. Electric Vehicle drivers are likely to continue to benefit as VED seeks to be more punitive on cars with high emissions levels.

Do I still need to tax my EV, even if it’s exempt?

Yes. Even if you owe no tax, you need to get your car vehicle taxed! You can do this at www.gov.uk/vehicle-tax or at the Post Office.

Will I need to pay road tax on an electric car in the future?

EVs were once tax-free (models sold pre-2017 - these models still are, in fact). As more and more of the population drive EVs, the likelihood is that EV drivers will continue to be taxed, although at lower levels, to maintain the incentive for us all to drive Green.

Is road tax included in an electric car lease?

Your leased vehicle will most likely come with its road tax paid. Make sure to check with your provider during the process of leasing your EV.

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