Rachel Reeves is set to introduce new car tax fees for millions of drivers, but the move could soon backfire dramatically.

Rachel Reeves pay-per-mile car tax fee could deter motorists from switching to EVs (Image: Getty)
Rachel Reeves’ pay-per-mile plan could be in complete tatters before it’s even got off the ground, with new research showing road users are prepared to completely turn their backs on electric cars. The Chancellor confirmed that a new 3p per mile electric car charge would come into effect from 2028, with hybrid models charged at a lower rate of 1.5p per mile.
The new fee could see motorists pay around £240 per year if travelling the average of 8,000 miles per annum. Meanwhile, a journey from London to Edinburgh would set road users back over £12, with a trip between John O’Groats and Lands End coming in at around £25.

Electric car pay-per-mile fees are set to launch in 2028 (Image: Getty)
The pay-per-mile fees are being introduced to offset the loss of fuel duty revenues as more motorists switch away from combustion cars to new EVs. However, there are concerns that the new charges could backfire, with road users likely to be put off making the switch altogether.
New data from WhatCar? Has backed this up, with research suggesting road users were set to ditch EVs altogether. A poll of 4,368 in-market car buyers found that 52% of respondents would be deterred from making the switch if the rule were implemented.
According to the data, more than a third of respondents (38%) who were already planning to buy an electric car said they would reconsider if a pay-per-mile charge was added. The fee looks set to be highly controversial, with a further two-thirds of road users believing that EV owners should not have to pay an additional tax.
According to the poll, only 13% would be happy to pay the 3p per mile fee, with only 20% admitting that the new charge would be a good idea at all.
Claire Evans, WhatCar? Consumer editor said: “Introducing an additional tax on EVs won’t only be unpopular, it will clearly make many drivers who are intending to buy an EV rethink their plans. Coming hot on the heels of the Government’s Electric Car Grant, which stimulated demand for EVs, it sends a terrible mixed message.”
Dan Tomlinson, Exchequer Secretary to the Treasury, backed the introduction of the new fees in the Government’s consultation report.
He argued: “If we do nothing, then by 2030 around one in five car drivers are expected to pay no fuel duty at all, while other motorists will continue to contribute an average of £480 a year. Given all cars cause congestion and wear and tear on the roads, this is not a fair outcome.
“That’s why the government will introduce electric Vehicle Excise Duty (eVED) from April 2028.”

