Guide · Budget 2026
3p a mile from 2028: is an electric car still cheaper than petrol?
The Budget on 28 October confirmed it: from April 2028, electric cars will pay 3p for every mile they drive. Does that wipe out the savings? If you charge at home, no. If you live on rapid chargers, it gets tight.
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The short version: add the 3p to an EV charged at home on the price cap and it costs about 10.5p a mile. On an overnight EV tariff it's about 4.9p. A typical petrol car costs about 17.5p at this week's pump prices. The tax only flips the result if you mostly use public chargers costing more than about 50p per kWh.
Work out your own pence per mile in the EV cost tool →
What the Budget confirmed
Electric Vehicle Excise Duty, or eVED, was first announced at Budget 2025. Budget 2026 confirmed it's going ahead and added some detail on how it will work.
- The rate: 3p a mile for fully electric cars (and hydrogen cars), 1.5p for plug-in hybrids. That's on top of normal vehicle tax.
- The start: 1 April 2028. You first pay it at your first vehicle tax renewal after that date.
- How you pay: give an odometer reading, estimate your miles for the year, then pay up front or spread it. Your actual mileage is squared up at the end of the year, and MOT records are used as a check.
- New this Budget: a mileage estimator at launch, an opt-in "eVED Connect" that lets your car report its own mileage, and automatic refunds for over-estimates by 2030.
- After 2028: the rate rises with inflation (CPI) from the 2029 to 2030 tax year.
It still has to pass through Parliament in the Finance Bill, so treat it as planned rather than certain.
What 3p a mile costs over a year
The sum is simple: your miles times 3p. At 8,000 miles that's £240 a year. A plug-in hybrid pays half, and the 1.5p applies to every mile, petrol or electric.
See the numbers
| Miles a year | Electric car (3p) | Plug-in hybrid (1.5p) |
|---|---|---|
| 5,000 | £150 | £75 |
| 8,000 | £240 | £120 |
| 10,000 | £300 | £150 |
| 15,000 | £450 | £225 |
| 30,000 | £900 | £450 |
Rates from the GOV.UK eVED policy paper (updated 28 October 2026). eVED is collected by DVLA alongside vehicle tax, so the figures above are the whole charge.
So is an EV still cheaper than petrol?
For most home chargers, comfortably. Here's the pence per mile with the 3p added, using today's prices and a typical 3.5 miles per kWh:
- Home, overnight EV tariff (6.5p): about 4.9p a mile.
- Home, price cap (26.32p): about 10.5p a mile.
- Public charger at 50p: about 17.3p a mile.
- Public charger at 75p: about 24.4p a mile.
- Petrol car, 45 mpg (172.78p a litre): about 17.5p a mile.
Over 8,000 miles, that's roughly £389 on an EV tariff and £842 at the price cap, against £1,396 for the petrol car. Lean on 75p chargers and the EV costs about £1,954.
See the numbers
| How you fuel | Price as charged now | Price at normal VAT | Energy per mile | With eVED | 8,000 miles |
|---|---|---|---|---|---|
| Intelligent Octopus Go, smart-charging rate | 6.5p/kWh (0% VAT) | 6.83p (5% VAT) | 1.9p | 4.9p | £389 |
| Price cap average, GB (1 Oct–31 Dec 2026) | 26.32p/kWh (0% VAT) | 27.64p (5% VAT) | 7.5p | 10.5p | £842 |
| Public charger, example 50p | 50p/kWh (41.67p before 20% VAT) | same | 14.3p | 17.3p | £1,383 |
| Public charger, example 75p | 75p/kWh (62.5p before 20% VAT) | same | 21.4p | 24.4p | £1,954 |
| Petrol, UK average, 45 mpg | 172.78p/litre (143.98p before 20% VAT) | same | 17.5p | n/a | £1,396 |
| Diesel, UK average, 55 mpg | 198.58p/litre (165.48p before 20% VAT) | same | 16.4p | n/a | £1,313 |
Home electricity in Great Britain has 0% VAT from 1 October 2026 to 30 June 2027 (normally 5%; Northern Ireland stays at 5%). eVED starts after that, so the 5% column is the fairer guide for 2028. At 5% the home rows change by less than 0.1p a mile. Public charging is 20% VAT. The EV tariff row assumes all charging happens in the cheap overnight slot. Unit rates only, standing charges excluded. We used today's prices because nobody knows 2028 prices; treat these as illustrations, not forecasts. Pump prices: DESNZ weekly average for the week starting 2 November 2026.
The number to remember: about 50p per kWh
With the 3p added, a 3.5 mi/kWh EV costs the same per mile as a 45 mpg petrol car when you pay about 50p per kWh (around 42p before VAT). Pay less and the EV wins. Pay more and the petrol car does.
Before eVED, that break-even point was about 61p. So the tax mostly bites drivers who rely on pricier rapid chargers. Our charger price table lists networks cheapest first, so you can see who's under the line.
Why 3p, and is it fair?
The government says 3p is around half the fuel duty the average petrol or diesel driver pays. Our own sum agrees: a 45 mpg petrol car pays about 5.3p a mile in fuel duty at today's 52.95p a litre, or about 6.4p once VAT on the duty is counted.
Fuel duty is frozen at 52.95p until 1 July 2027, when it's due to rise by 5p plus inflation. Whether a mileage tax is fair is a political argument. On running costs alone, home charging still comes out well ahead.
Who it hits hardest
- High-mileage drivers. At 30,000 miles, eVED is £900 a year. But petrol for the same miles at 45 mpg is about £5,240, against about £3,160 for an EV at the price cap including eVED.
- Drivers without a driveway who use rapid chargers for most miles. This is where the 50p line matters.
- Plug-in hybrid drivers who rarely plug in. They pay 1.5p on every mile as well as fuel duty on the petrol they burn.
It's planned for UK-registered cars, including Northern Ireland. Cars registered in Guernsey or Jersey aren't on the UK system. For island running costs, see EV charging in the Channel Islands.
What to do now
- Nothing to pay yet. The first eVED bill comes with your first vehicle tax renewal after 1 April 2028.
- Buying an EV? Add 3p to the pence per mile from our EV cost tool to see the 2028 picture.
- Charge at home on an EV tariff if you can. That's what keeps you far below petrol. Compare them in our off-peak EV tariff guide.
- Check your car's recorded mileage in its MOT history on GOV.UK, since that's what the estimates will be checked against.
Prices with and without VAT
Home electricity in Great Britain: 0% VAT from 1 October 2026 to 30 June 2027 (normally 5%; Northern Ireland stays at 5%). Public and workplace charging: 20% VAT from 1 November 2026. Petrol and diesel: 20% VAT on the pump price, which includes fuel duty (HMRC VAT Notice 701/19, checked 3 Nov 2026).
Frequently asked questions
When does the EV pay-per-mile tax start?
Electric Vehicle Excise Duty (eVED) starts on 1 April 2028. You pay it alongside your normal vehicle tax, from your first vehicle tax renewal after that date. It still needs to pass into law through the Finance Bill, so treat it as planned.
How much is eVED?
3p a mile for fully electric (and hydrogen) cars and 1.5p a mile for plug-in hybrids, on top of normal vehicle tax. It rises with inflation (CPI) from the 2029 to 2030 tax year. At 8,000 miles a year that is £240 for an electric car, or £120 for a plug-in hybrid.
Is an electric car still cheaper than petrol with the 3p a mile tax?
Usually, if you charge at home. Using prices checked on 3 November 2026 and 3.5 miles per kWh, an EV charged at the price cap costs about 10.5p a mile including eVED, and about 4.9p on a 6.5p overnight EV tariff. A 45 mpg petrol car costs about 17.5p a mile at this week's average pump price. If you rely on public chargers, the EV is only cheaper when you pay less than about 50p per kWh. These are our illustrations at today's prices; prices in 2028 will be different.
Will I need a tracker in my car?
No. The government's plan is that you give an odometer reading and an estimate of your miles for the year when you renew your vehicle tax, with MOT mileage records used as a check. Budget 2026 added an opt-in option called eVED Connect that would use your car's built-in connectivity to report mileage, if you choose to use it.
Does eVED apply in Northern Ireland, Guernsey or Jersey?
It is planned for UK-registered cars, and the law changes include Northern Ireland. Guernsey and Jersey register vehicles under their own systems, so a car registered there is not part of the UK scheme.
Related guides
- Electric car tax (VED) in 2026/27
- EV cost per mile vs petrol
- Public charging reality check
- Intelligent Octopus Go vs other EV tariffs
- January 2027 price cap forecast and EV charging
Sources (checked 3 November 2026 unless stated)
- HM Treasury: Electric Vehicle Excise Duty (eVED) (updated 28 Oct 2026): rates, start date, how to pay.
- Budget 2026 (28 Oct 2026): mileage estimator, eVED Connect, refunds, fuel duty freeze to 1 July 2027.
- UK Parliament written answer 37031 (26 Oct 2026): 3p is around half the average fuel duty.
- DESNZ: weekly road fuel prices (week starting 2 Nov 2026).
- GOV.UK: Fuel Duty rates.
- Ofgem: energy price cap (26.32p, 1 Oct–31 Dec 2026).
- Octopus Energy: Intelligent Octopus Go (6.5p, checked 31 Oct 2026).
- HMRC VAT Notice 701/19.