The UK government has announced a national pay-per-mile road user charge for electric and hybrid cars, scheduled to start in 2028. The autumn budget introduced the new levy as a way to recoup tax revenue lost as the vehicle fleet shifts away from petrol and diesel, and to move toward charging drivers by road use rather than fuel consumption.
What the policy will require of drivers and what it raises
Under the plan, electric vehicles will be charged 3p per mile while hybrid cars will face 1.5p per mile, on top of any existing vehicle taxes. The government’s independent budget office estimates an electric car covering 8,500 miles a year would pay about £255 under the new regime, which amounts to roughly half the per-mile cost that petrol and diesel drivers currently contribute through fuel duty.
Revenue forecasts in the budget suggest the measure will raise around £1.1 billion in 2028–29, increasing to approximately £1.9 billion by 2030–31. Those figures reflect projections for take-up and average mileage, and the Treasury will monitor how the new charge interacts with other transport revenues as electrification continues.
Transport technology organisations welcomed the announcement and signalled readiness to support delivery. Industry representatives said the sector can provide digital and roadside systems that go beyond simple odometer-based monitoring, enabling more flexible implementation and offering tools that could help manage cross-border and foreign-vehicle charging. Trade groups also indicated they want to work with government as the scheme is designed and rolled out.
At the same time, analysts warn the new charge could influence consumer demand for electric cars ahead of the 2030 ban on new petrol and diesel sales. The budget office noted a potential fall in EV sales of up to 440,000 vehicles, which would reduce projected Treasury receipts by around £200 million in 2030–31 compared with current forecasts.
Road user charging proponents point to wider policy aims beyond revenue. Industry and public transport groups said usage-based charging can be fairer, encourage more efficient use of the road network, and support a shift from private car trips to public transport. One trade association flagged that pricing which reflects actual road use could help reduce congestion and improve bus and coach viability, because a single full double-decker can replace many private cars on congested routes.
