The question of whether electric cars are cheaper to run than petrol vehicles has taken a new turn, following the UK government’s plan to introduce a pay-per-mile tax for EVs from 2028.
Under the proposed system, electric vehicle drivers will pay 3p per mile — a move that could reduce the financial advantage EVs have traditionally offered.
The New EV Tax Explained
From April 2028, drivers of electric vehicles will be charged 3p per mile, as outlined in the Autumn Budget by Rachel Reeves.
Plug-in hybrids will face a reduced rate of 1.5p per mile, with mileage expected to be tracked through annual MOT checks.
For the average UK driver covering around 7,400 miles per year, this equates to roughly £222 annually in additional costs.
Electric Car Running Costs
Despite the new tax, electric vehicles still offer several cost advantages:
- Lower energy costs: Home charging typically costs around 7–10p per mile
- Reduced maintenance: Fewer moving parts mean lower servicing costs
- Tax benefits: Lower Benefit-in-Kind rates for company car drivers
However, the gap is narrowing. A driver covering 10,000 miles per year could pay an additional £300 in EV tax, reducing overall savings.
Petrol Car Running Costs
Petrol vehicles remain subject to fuel duty and VAT, which together equate to roughly 12–15p per mile depending on efficiency.
For the average driver:
- Annual fuel costs can exceed £1,000
- Maintenance costs are generally higher due to engine complexity
- No additional mileage-based tax is applied
However, petrol cars still tend to have:
- Lower upfront purchase prices
- No need for home charging installation
Cost Comparison at a Glance
| Factor | Electric Car (with EV tax) | Petrol Car |
|---|---|---|
| Cost per mile | ~7–10p + 3p tax | ~15–20p |
| Annual cost (7,400 miles) | ~£962–£1,172 | ~£1,100–£1,400 |
| Maintenance | Lower | Higher |
| Upfront costs | Higher | Lower |
Industry Concerns
The Office for Budget Responsibility has warned the tax could reduce EV uptake, predicting up to 440,000 fewer electric vehicles on the road by 2030.
Critics argue the policy risks weakening incentives at a crucial time for adoption.
As new pay‑per‑mile proposals reshape running‑cost calculations, our guide to the potential EV tax explores how these charges could influence the true cost difference between electric and petrol cars.
Environmental Considerations
Transport accounts for a significant share of UK emissions, and electric vehicles play a key role in reducing this impact.
While EVs still produce zero tailpipe emissions, the introduction of a mileage-based tax raises questions about how policy aligns with long-term environmental goals.
What This Means for Drivers
For most drivers, electric cars are still cheaper to run overall — but the margin is shrinking.
The real impact depends on:
- Annual mileage
- Access to home charging
- Energy prices
- Long-term ownership plans
And with additional policies coming into play, our breakdown of the UK’s new electric‑vehicle taxes helps explain how upcoming changes might affect long‑term affordability for drivers.
Explore More
For practical advice on running costs, maintenance, and how ownership expenses affect your vehicle over time, visit our maintenance guidance hub.
You might also find useful:
- How running costs impact your car’s long-term value
- Whether electric cars are more expensive to maintain
Final Thoughts
Electric cars remain the more cost-effective option for many drivers, even with the introduction of a pay-per-mile tax. However, the financial advantage is no longer as clear-cut as it once was.
As policies evolve and costs change, drivers will need to weigh short-term expenses against long-term savings — and stay informed as the landscape continues to shift.
As costs shift, understanding your car’s position becomes more important when deciding what to do next.
If you’re curious to find out your car’s position, enter your reg to get a free online quote, compare offers from trusted UK buyers, and sell quickly without the hassle. It’s the straightforward way to move on while you decide which type of car best suits your future driving costs.