As more drivers switch to electric vehicles (EVs), government revenue from fuel duty will decline. To address this, the UK Government is consulting on the introduction of Electric Vehicle Excise Duty (eVED) which is proposed to take effect in April 2028.
In short, eVED is a new tax framework designed to ensure EV owners contribute to the upkeep of the road network, replacing the tax exemptions originally introduced to incentivise the early adoption of electric cars.
Consumer Scotland has submitted a formal response to this consultation. This is an important opportunity to ensure that as the tax system evolves it remains fair, affordable and attractive for all consumers.
Why this matters for consumers
Our research shows that consumers’ behaviours and decisions on sustainable consumption are mainly influenced by cost, convenience and clarity. Any new tax on EVs therefore needs to be carefully designed to avoid weakening consumer confidence in these areas. We have identified three main issues for consumers – fairness, affordability and reinvesting revenue.
Fairness for all consumers
Current EV ownership is concentrated among higher-income households with access to home charging. Over time, however, it is anticipated that EV drivers will increasingly reflect the wider population, including consumers in suburban, rural and remote areas, and those who rely heavily on cars for essential travel. Drivers in these areas often travel longer distances but face fewer reliable public charging options. This can increase charging costs and create uncertainty about completing longer journeys, making the switch to an EV less attractive.
It is therefore essential that the introduction of eVED does not create additional barriers for these consumers or slow progress towards more equitable EV adoption.
Affordability
EVs can be cheaper to run than petrol or diesel vehicles, particularly for drivers who can charge at home. However, EV drivers who rely on public charging already face higher costs, and the financial benefits of switching are less clear. Introducing the eVED risks reducing the cost advantage of EVs for these drivers. Clear information about how the new system will work and what it will mean for motorists in practice, will be essential to help consumers make informed decisions.
Reinvesting revenue in charging infrastructure
A strong and affordable public charging network will be critical as EV ownership grows. Projected demand suggests much greater investment will be needed in the coming years and additional tax revenue collected from future eVED revenue could be reinvested into expanding and improving the public charging network. This would help reduce costs for consumers who depend on public charging and increase confidence that the system is supporting, not hindering, the transition to electric vehicles.
A clear and transparent framework showing how revenue is being used would also help build trust and improve public understanding of the new tax.
Looking ahead
The planned introduction of eVED in 2028 is an important moment in the transition to electric vehicles in the UK. A sustainable tax system is necessary, but it must be designed with consumers in mind.