Drivers in the south-west of England would pay nearly four times as much as those in London as a result of Labour’s mileage-based tax on electric cars, according to analysis of official data.
The 3p-a-mile road charge, announced in the autumn budget and due to take effect in 2028, is expected to raise £1.1bn a year, partly offsetting the loss of fuel duty revenues as drivers switch from petrol to electric vehicles.
The analysis underscores how heavily rural motorists would be hit compared with their urban counterparts. Critics warn the disparity risks creating another obstacle to electric vehicle uptake, just as ministers are trying to accelerate sales.
Drivers in the south-west would be affected most, the research suggested, paying on average £110.25 a year extra because of the 3p a mile charge, closely followed by the East Midlands, at £105.09.
People in London would pay just £33.09 a year, despite already having among the highest concentrations of electric vehicles and charging points. The north-east and north-west, the next most affordable regions, would average £82.20 and £83.79.
Thom Groot, chief executive of The Electric Car Scheme, a leasing group which carried out the analysis, said the tax could discourage EV take-up just as the government is trying to transition ownership from “early adopters to the mass market”.
“There are still a lot of people in the mass market who are very sceptical about EVs … so anything that gives people a reason not to [buy one] creates yet another boundary.”
People living in smaller, rural towns and villages nearer to cities would pay the most on average, at £156.51 a year. Those in urban areas and cities would pay £76.02.
The research was based on 2024 data from the annual National Travel Survey.
Electric car sales rose by nearly a quarter in 2025 to a record 473,000 – about 23.4% of the total market, though still below the target of 28% in the national plan, known as the zero emission vehicle mandate.
Groot added: “Even when this tax comes in, the major savings and environmental benefits of going electric remain firmly in place. EVs will continue to be the most practical and future-proof choice for UK drivers.”
The mileage-based charge was announced alongside a £1.3bn boost to the electric car grant, a scheme that gives buyers up to £3,750 off the price of a new EV. The Office for Budget Responsibility estimated that the tax could reduce EV sales by about 440,000 over five years.
Officials are consulting on the 3p-a-mile tax, which falls to 1.5p a mile for plug-in hybrid drivers, until mid-March.
Fuel duty is expected to raise £24bn this financial year but receipts are already falling, from £27.5bn in 2019-20.
A government spokesperson said: “Similar to fuel duty, those who drive more will pay more. Right now, electric vehicle drivers pay no fuel duty, while petrol drivers pay around £480 a year. That’s not fair. Under the new system, electric vehicles will pay half the duty of petrol cars – still the cheaper, greener choice.”
