Do electric cars pay road tax in the UK?

Electric cars pay GBP 0 road tax in the first year. From year 2 onwards, they pay the standard rate of GBP 180/year. This changed from April 2025 when the first-year exemption for EVs valued under GBP 40,000 was removed. EVs over GBP 40,000 already paid a supplement in prior years.

What changed for electric car road tax in 2026?

From April 2025, electric vehicles no longer qualify for the first-year VED exemption if they cost under GBP 40,000. They now pay the standard first-year rate based on CO2 emissions, which for a 0g/km EV is GBP 0 in year 1 anyway. From year 2, all EVs pay GBP 180/year. Premium EVs (over GBP 40,000) pay an additional GBP 410/year supplement for 5 years.

Are company car electric vehicles still tax-efficient?

Yes. Pure electric company cars attract a benefit-in-kind rate of just 3% of the P11D value, compared to 28-37% for high-emission vehicles. A GBP 40,000 electric company car costs the employee only GBP 480/year in BiK tax (at 40% rate). Road tax (VED) is GBP 0 for the company in year 1, then GBP 180/year.

How much road tax does a Tesla cost in the UK?

A Tesla Model 3 (around GBP 40,000) costs GBP 0 road tax in year 1, then GBP 180/year from year 2. A Tesla Model S or X (over GBP 40,000) costs GBP 0 in year 1, then GBP 180 plus GBP 410/year supplement = GBP 590/year for years 2-6, then GBP 180/year thereafter.

Do plug-in hybrids pay less road tax?

Plug-in hybrids with CO2 emissions under 50g/km qualify for reduced first-year rates (GBP 0-30) and standard rate of GBP 180/year from year 2. However, benefit-in-kind rates for PHEVs range from 3-16% depending on electric range, making them less tax-efficient than pure EVs but still cheaper than conventional vehicles.

UK Road Tax Electric Cars 2026 — EV VED Rates and Exemptions

UK Road Tax Electric Cars 2026

Electric vehicles have enjoyed significant road tax advantages in the UK for years, but those benefits have gradually reduced. This guide explains exactly what electric car owners pay in 2026. ITV.es and DGT.

Electric Car Road Tax Changes in 2026

What Changed in 2025-2026

The landscape for electric vehicle road tax shifted significantly:

Before April 2025:

EVs under GBP 40,000: GBP 0 road tax indefinitely
EVs over GBP 40,000: GBP 0 in year 1, then GBP 410/year supplement

From April 2025 onwards:

All EVs: GBP 0 in year 1 (still true — 0g/km = Band A)
All EVs from year 2: GBP 180/year standard rate
EVs over GBP 40,000: GBP 410/year supplement for years 2-6

The key takeaway: Electric cars still cost nothing in year 1, but the "free forever" road tax for cheaper EVs has ended.

Current Electric Car VED Rates

First-Year Rates for EVs

| Vehicle Type | CO2 Emissions | First Year Rate |

|-------------|----------------|-----------------|

| Pure electric | 0g/km | £0 |

| Plug-in hybrid | 1-50g/km | £0-30 |

| Plug-in hybrid | 51-75g/km | £15-30 |

All pure electric vehicles fall into Band A (0g/km), meaning £0 in the first year regardless of price.

Annual Rates from Year 2

| Vehicle Value | Annual VED | Premium Supplement |

|--------------|-----------|-------------------|

| Under £40,000 | £180 | None |

| £40,000-45,000 | £180 | £410/year |

| Over £45,000 | £180 | £410/year |

Premium supplement applies for years 2-6 of the vehicle's life.

Electric Car Road Tax Examples

Example 1: Affordable EV (Under GBP 40,000)

Nissan Leaf or similar, valued at £30,000:

Year 1: GBP 0
Years 2+: GBP 180/year
5-year total: GBP 720

This is the same as a petrol family hatchback.

Example 2: Premium EV (GBP 40,000-60,000)

Tesla Model 3 Long Range or BMW i4, valued at £50,000:

Year 1: GBP 0
Years 2-6: GBP 180 + GBP 410 = GBP 590/year
Years 7+: GBP 180/year
5-year total: GBP 0 + (GBP 590 × 4) = GBP 2,360

Compared to equivalent petrol BMW 3 Series (165g/km):

Year 1: GBP 285
Years 2+: GBP 180/year
5-year total: GBP 285 + (GBP 180 × 4) = GBP 1,005

The premium EV costs £1,355 more over 5 years due to the supplement. However, BiK advantages for company cars may offset this.

Company Car Tax for Electric Vehicles

Benefit-in-Kink Rates

Pure electric vehicles enjoy the lowest BiK rates available:

| Vehicle Type | BiK Rate |

|-------------|----------|

| Pure electric (0g/km) | 3% |

| PHEV with electric range 130+ miles | 3% |

| PHEV with electric range 70-129 miles | 4% |

| PHEV with electric range 40-69 miles | 7% |

| PHEV with electric range 10-39 miles | 11% |

Company Car Tax Example

Electric company car, P11D value £45,000:

BiK value: GBP 45,000 × 3% = GBP 1,350
Higher-rate employee (40%): GBP 1,350 × 40% = GBP 540/year
Standard-rate employee (20%): GBP 1,350 × 20% = GBP 270/year
VED paid by company: GBP 0 (year 1), GBP 180/year (years 2+)

Compared to diesel SUV (200g/km), P11D £55,000:

BiK value: GBP 55,000 × 36% = GBP 19,800
Higher-rate employee: GBP 19,800 × 40% = GBP 7,920/year
VED paid by company: GBP 285 (year 1), GBP 180/year (years 2+)

Saving with electric: £7,380/year in employee tax alone.

Is Electric Car Road Tax Worth It?

For Private Buyers

The road tax savings from going electric are modest:

Affordable EV: Same GBP 180/year as equivalent petrol from year 2
Premium EV: GBP 410/year extra in supplement costs

Road tax should not be the primary factor in choosing an EV. Fuel savings, maintenance savings, and environmental benefits typically outweigh road tax considerations.

For Company Car Users

Electric remains highly tax-efficient:

3% BiK rate is the lowest available
Employees save thousands per year vs high-emission alternatives
Employers pay less employer NIC on the benefit (13.8% of BiK value)

Road Tax vs Total Cost of Ownership

Annual Comparison

|--------------|-------------|-------------------|------------|

| Road tax | £180 | £180 | £180 |

| Fuel | £400-600 | £1,200-1,500 | £1,000-1,400 |

| Maintenance | £300-400 | £400-500 | £500-700 |

| Total | £880-1,180 | £1,780-2,180 | £1,680-2,280 |

Road tax is a small fraction of the total cost. Going electric saves £700-1,100/year in fuel and maintenance, far outweighing the £0-410 difference in road tax.

Key Takeaways

1. Pure EVs cost £0 in the first year of road tax

2. From year 2, all EVs pay £180/year standard rate

3. Premium EVs over £40,000 pay an extra £410/year supplement for years 2-6

4. Company car BiK for electric vehicles is just 3% — extremely tax-efficient

5. Private buyers see little road tax advantage over petrol cars

6. Company car users save thousands annually by choosing electric

7. Fuel savings dwarf road tax differences — total cost matters more

8. Road tax is not a primary reason to buy electric, but company car tax is

Electric car road tax in 2026 offers a zero first-year rate and competitive annual rates. For company car users, the combination of low BiK and zero or low VED makes electric the most tax-efficient choice available.

Official Resources: ITV.es - ITV Booking | DGT - Direccion General de Trafico

Understanding vehicle taxation is essential for every car owner in the United Kingdom. The vehicle excise duty system, commonly referred to as road tax, is administered by the DVLA and applies to all vehicles registered on UK roads. Whether you own a family car, a high-performance vehicle, or a commercial van, you must ensure your vehicle remains properly taxed throughout the year.