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.

Ask an expert

Need expert advise regarding leasing? Submit your question now

Send a Question

eNews Signup

Our best vehicle leasing deals delivered direct to your inbox

Signup now

Callback Request

Request a callback from an experienced vehicle leasing advisor

Request callback

More from our blog…

Trustpilot LogoExcellent - 5.0 out of 53647 Verified Reviews

John Hauxwell TrustPilot 5 Star

Really good company thanks fiona

Added 3 days ago

Barry Loynes TrustPilot 5 Star

My first experience of car leasing has been made a pleasure because of the staff at Rivervale. Matt first contacted me to find out exactly what...

Added 8 days ago

Milorad Vasic TrustPilot 5 Star

Purposeful communications and curtesy follow up calls, as well as securing an excellent deal, make them a good company to work with.

Added 9 days ago

J.Harrison TrustPilot 5 Star

Fantastic customer service, I was kept informed throughout the process and although the delivery of my car was delayed a couple of weeks, Matt...

Added 9 days ago

Shiju Joseph TrustPilot 5 Star

Fast and easy

Added 13 days ago

Christine Hampshire TrustPilot 5 Star

Cannot praise this company enough. Jake has been amazing from start to finish. From equiry to delivery of vehicle was 14 days, completely stress...

Added 13 days ago

Jon Dougherty TrustPilot 5 Star

Very impressed by Rivervale . Jake and the admin team ,especially Pauline , made acquiring my new car really straightforward.Thank you

Added 13 days ago

Harry Davies TrustPilot 5 Star

Great service from everyone at Rivervale - market-beating terms for a new Hyundai Tucson, quick delivery times and walking me through the application...

Added 19 days ago

Alvin TrustPilot 5 Star

I was very happy with the service received after enquiring about an Audi - friendly, professional and efficient work from Jake and the support...

Added 19 days ago

DAVID M TrustPilot 5 Star

I first knew of Rivervale around 4 years ago when I was looking to lease a car personally and for various reasons I did not proceed. They were...

Added 20 days ago

Arval Lex Autolease Alphabet BVRLA Seagulls Leaseplan Leasys Novuna Vehicle Solutions Santander Millbrook Technology ALD