Pay-Per-Mile Tax: Why Half of UK Drivers Are Refusing to Go Electric

Imagine finally being convinced to make the switch to an electric vehicle. You've done the research, crunched the numbers on fuel savings, and you're ready to commit. Then the government floats the idea of a tax that charges you for every single mile you drive — potentially wiping out the financial case for going electric almost entirely. Would you still sign on the dotted line?

For roughly half of UK motorists, the answer is a firm no. And that reluctance is now backed by hard data.

What's Actually Happening

The AA's latest EV Readiness Index — a comprehensive survey tracking British drivers' attitudes towards electric vehicles — has revealed a striking finding: proposals for a pay-per-mile road pricing scheme are actively deterring around 50% of motorists from purchasing an EV, according to reporting by Auto Express.

This isn't simply a case of people grumbling about change. The data points to a genuine crisis of confidence in the government's long-term intentions towards EV ownership. Drivers who might otherwise be ready to make the switch are holding back, spooked by the possibility that the financial savings they're counting on — lower running costs, no fuel duty — could be clawed back through a new taxation framework before they've even paid off the car.

The AA's research found that uncertainty around government policy is now one of the top barriers to EV adoption, sitting alongside the more familiar concerns about charging infrastructure, range anxiety, and the upfront purchase price. What makes this particular deterrent so damaging is that it isn't a technical problem waiting to be solved by better batteries or more charge points. It's a political problem — and those can linger for years.

Why This Matters: The Bigger Picture

To understand why this is such a significant moment, it helps to appreciate the scale of the transition the UK has committed to. The government has set a target of ending the sale of new petrol and diesel cars by 2035, with the Zero Emission Vehicle (ZEV) mandate already requiring manufacturers to ensure a rising percentage of their UK car sales are electric — 28% in 2028, scaling up to 80% by 2030.

That's an extraordinarily ambitious timeline. And it depends almost entirely on ordinary drivers choosing to buy EVs in large numbers, not just fleet operators and early adopters.

Here's the problem. The financial case for going electric has always rested on a fairly simple equation: yes, the car costs more upfront, but you save money on fuel. Electricity is cheaper per mile than petrol or diesel, and EV drivers currently pay no fuel duty — a tax that raises roughly £25 billion a year for the Treasury.

That's a colossal hole in public finances that grows larger with every EV sold. The government has known for years that it needs a replacement revenue stream. Road pricing — charging drivers per mile travelled — has long been discussed as the most logical solution. The idea has been floated in various forms since at least the Alistair Darling-era proposals of the mid-2000s, which were ultimately shelved after a public petition attracted nearly two million signatures.

But what was once a distant theoretical discussion is now feeling very real to drivers. And when half the potential EV market decides to stay on the forecourt rather than risk buying into a system whose rules might change beneath their feet, the entire net zero transport strategy starts to wobble.

The Legal and Regulatory Landscape

There is currently no legislation in place for a pay-per-mile road pricing scheme in the UK. Any such system would require primary legislation through Parliament, and would almost certainly face significant political and legal scrutiny.

However, there are relevant frameworks already operating that show the direction of travel. Vehicle Excise Duty (VED) — road tax — was reformed in April 2025 to bring EVs into the system for the first time. Previously exempt, EV owners now pay the standard annual rate, with new EVs registered from April 2025 also subject to the Expensive Car Supplement if they cost over £40,000 — adding over £600 per year for the first five years.

This is significant. It demonstrates that the government is willing to revisit the tax treatment of EVs as adoption grows, and it has understandably made drivers nervous about what comes next.

The Finance Act and Road Traffic Act 1988 provide the existing statutory framework for vehicle taxation and road use regulation. Any pay-per-mile scheme would likely require new primary legislation, potentially including amendments to the Transport Act 2000, which already contains provisions relating to road user charging in certain contexts — most notably the powers used to establish the London Congestion Charge under a local Transport for London framework.

A national scheme would be an entirely different beast, raising serious questions about data privacy under the UK GDPR and the Data Protection Act 2018, given that tracking mileage at a national scale would necessarily involve monitoring vehicle movements in real time.

What Drivers Should Know Right Now

If you're sitting on the fence about an EV purchase, here's what the current situation actually means for your wallet and your decision-making:

1. No pay-per-mile tax exists yet — and it may never arrive in its feared form The proposals being discussed are not law. Multiple governments have considered and then quietly dropped road pricing. Don't let a hypothetical future tax be the sole reason you avoid a purchase that might save you money today.

2. VED changes are already in effect — factor them in From April 2025, EVs pay road tax like everyone else. If you're buying a new EV over £40,000, budget for the Expensive Car Supplement. This is real money, not speculation.

3. Fuel duty savings remain substantial for now The average UK driver covers around 7,400 miles per year. At current electricity prices, an EV typically costs 3–4p per mile to charge at home versus 12–15p per mile for a petrol car. That's a meaningful saving that still makes financial sense for many drivers, even accounting for the new VED charges.

4. Consider your mileage profile carefully If you're a high-mileage driver, the savings from cheaper electricity are more significant — but you'd also be more exposed to a future mileage-based tax. Low-mileage drivers might find the equation less compelling either way.

5. Watch the ZEV mandate closely The mandate creates pressure on manufacturers to discount EVs to hit sales targets. This has already led to some notable deals. If you're considering a switch, the next two to three years may offer better purchase incentives than you'd expect.

Looking Ahead: The Road to 2035

The AA's findings should be a wake-up call for policymakers. Consumer confidence is fragile, and the EV transition cannot succeed through mandates and targets alone. Drivers need to believe that the rules won't change against them mid-journey.

The government faces a genuinely difficult balancing act. It needs to replace fuel duty revenue — that £25 billion figure isn't going to disappear from the budget quietly. Road pricing is, in many economists' eyes, a fairer and more efficient system than fuel duty, because it can reflect actual road use, time of day, and congestion. But the politics of it are toxic, and the timing — right in the middle of the most significant shift in personal transport in a century — could not be worse.

What's needed urgently is policy clarity. Not necessarily a decision to implement road pricing, but a clear statement of intent, a timeline, and crucially, a commitment to transitional protections for drivers who have already invested in EVs on the basis of current incentives. Other countries managing EV transitions — Norway being the most cited example — have demonstrated that long-term, consistent policy frameworks build consumer trust. Chopping and changing, or even appearing to chop and change, does the opposite.

Until that clarity arrives, expect the hesitation to continue. Half of Britain's drivers aren't anti-EV. They're simply unwilling to make a significant financial commitment into a policy fog — and on that basis, it's hard to blame them.

Source: Auto Express / AA EV Readiness Index. All figures cited reflect publicly available data at time of writing.