Fleets will be able to licence vehicles and pay for eVED in bulk, reducing administrative burden.
The Government said it may make an application programming interface (API) available, to better support larger fleets.
It will also explore using OEM-fitted telematics to more accurately report mileage data, although this would be opt-in only.
The DVSA, DVLA and police will have the power to direct a vehicle’s registered keeper to take the vehicle for examination when odometer fraud has been suspected.
Prior to launch, the Government will engage with the fleet and leasing sector to explore bulk processing and digital reporting.
Exchequer Secretary to the Treasure Dan Tomlinson said: “One of the clearest examples of overdue reform is motoring taxation.
“Today, drivers of petrol and diesel vehicles pay tax on how much they drive through fuel duty at the pump, while drivers of electric vehicles currently make no equivalent contribution.
“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 eVED from April 2028. It will be set at half of the equivalent rate of fuel duty for electric cars, and half again for plug-in hybrid cars.
“eVED will ensure all car drivers contribute, but will still maintain important incentives to switch to an EV. eVED will not require ‘trackers’ in cars, nor will the Government ask people to interact with a whole new tax system: car drivers will pay for the miles they drive alongside paying their usual road tax (VED).
“We are consulting on the details of this scheme here, and we would like to hear from you.
“The Government will continue to take steps to ensure the transition to electric is successful, fair and fiscally sustainable.
“Through this consultation and wider engagement, the Government wants to hear your views on eVED and how best to implement it.”
Reaction
Vicky Edmonds, CEO at EVA England:
“This policy still does not work for drivers. The Government has made one welcome change for newer EVs, but the wider scheme remains too complex, risks leaving people out of pocket and fails to give drivers the confidence they need.
“At such a crucial point in the switch to electric, ministers should be making the system simpler, fairer and easier to understand, not pressing ahead with a policy whose key faults remain unresolved.
“This now piles pressure on the public charging review that must pave the way for affordable charging, or this transition simply won’t work for drivers.”
Toby Poston, CEO at the BVRLA:
“It is great that the Government has taken some of the roughest edges off its eVED plans. They’ve accepted that a tax designed around private motorists won’t work for the fleets that are driving the UK’s transition to EVs.
“But there is no avoiding the fact that you can’t create a smooth switch to EVs by making them more expensive to own. The mechanics of the tax may have improved, but the timing is still wrong.”
Tanya Sinclair, CEO at Electric Vehicles UK:
“Government has listened where it matters. Dropping mandatory mileage checks for cars under three years removes a significant speed bump that would been a burden on new drivers and big fleets.
“The other changes it made recognise the practicalities of how fleet operators work.
“Where Government still needs to do better is in how it communicates its policies to drivers. We still have a mix of incentives, taxes, grants and policies which don’t clearly echo its vision of an all-electric future.”
Ben Nelmes, CEO at New AutoMotive:
“If the Government wants people to switch to EVs, it needs to make electric motoring easy, attractive and affordable.
“Today’s decision to drop mandatory mileage checks for brand-new cars is welcome. But much of the wider package remains untested and risks becoming an albatross around the neck of the next Chancellor and transport secretary.
“It is absurd that families heading off on holiday will be taxed by the UK Government for driving on French roads. It is staggering that the DVLA’s legacy computers are unable even to process a simple automatic refund when someone sells or scraps their car – that in itself should be a massive red flag for the incoming Government about the deliverability of this policy.
“With uncertainty over EV targets and a risky new tax on electric motoring, drivers, businesses and investors will question the UK’s commitment to the transition.
“New ministers should pause, take stock and get this right.”
Simon Smith, CEO at Voltempo:
“Scrapping the under-three-year mileage checks is the right call. That proposal meant leased and rental vehicles off the road for checks that added cost, not value.
“Government listened, and the fleet package – bulk licensing, bulk payment, estimated mileage – is built around how the industry runs, not how Whitehall assumed it runs.
“The next test will be delivery. Guidance, systems and the MOT network all need to be ready well before April 2028.”
Peter Golding, CEO at FleetCheck:
“We welcome the fact the Government has made a series of concessions on the practicalities of eVED implementation that could potentially make life easier for fleets but it doesn’t change the core objection that the whole idea is probably just too much, too soon when it comes to electrification for both fleet and private buyers.
“Just at the point in time when electric cars should be starting to feel like the natural choice for buyers, this is unwelcome expense and complication.”
David Bushnell, director of consultancy and strategy at Fleet Operations:
“The Government’s decision to introduce specific eVED arrangements for fleets is a welcome acknowledgement that a system designed around individual motorists would not work for businesses operating vehicles at scale.
“Allowing fleets to provide central mileage estimates, make aggregate payments and settle liabilities before defleeting should reduce some of the administrative burden.
“The proposed API and web interface are also sensible, provided they are thoroughly tested and supported by clear guidance ahead of April 2028.
“These changes, however, address the mechanics of the tax rather than its wider impact. At 3p per mile, a fully electric car covering 20,000 miles a year would attract an annual charge of £600, which fleets will need to build into whole-life cost calculations.
“The cost will also be felt by employees who have moved from privately owned cars into EVs through salary sacrifice schemes, including many public-sector workers.
“While we recognise the principle that those who drive more should contribute more, the timing risks causing some employees considering salary sacrifice to delay making the switch.
“This could create a pause in EV uptake at a time manufacturers face increasingly demanding ZEV mandate targets. Drivers and fleets must also understand that the 3p rate will not remain fixed, with increases in line with CPI planned from 2029-30.
“The Government must now work closely with the fleet industry to ensure eVED does not create unnecessary friction or weaken the business case for electrification.”
