Motorists who own a certain type of car have been urged to expect a letter from the DVLA in the coming weeks, even if they have never received one before.
The beginning of April 2025 saw a number of changes introduced to Vehicle Excise Duty (VED), with many drivers now paying more to keep their car on the roads.
This is certainly the case for owners of electric vehicles, which are now subject to paid road tax. Matt Walters, Head of Consultancy Services and Customer Value at Ayvens, noted that the change goes against the Government’s policy to encourage EVs, making them more expensive to run.
He explained: “New cars bear the brunt of tax changes. This has left fleets and private motorists in the dark about a tax policy that could cost electric vehicle drivers an additional £1,300 over a four-year lease contract.
“Despite growing pressure on fleets to reduce CO2 emissions, operators are facing challenges with reduced payload and range, charging networks with spaces designed for cars, and additional administrative burdens for the largest vans.”
For more than a decade, electric vehicles have been tax exempt in the UK in a bid to encourage more drivers to make the switch from petrol or diesel models to a cleaner alternative.
However, with more than a million electric cars on the UK roads, the DVLA removed the exemption on April 1 2025. Whilst EV owners did not need to pay for their road tax on the day, they will typically be charged when their current policy expires.
Drivers of all road-going vehicles in the UK can pay for their road tax up to two months in advance of the current policy ending, with motorists typically getting a letter from the DVLA on the fifth day of the month before the charge is due.
Under the changes made by the DVLA, all electric cars sold between April 1 2017 and March 31 2025 will be subject to the same flat rate of £195 per year as petrol or diesel models.
New electric models will incur a tax fee of £10 for the first year and £195 each year afterwards. However, if the model has a retail price of over £40,000, drivers will also need to pay the expensive car supplement, which currently stands at £425, from years two to six.
As a result, new car buyers who choose some of the most popular electric models on the market, including the Tesla Model Y or Audi Q4 e-tron, will be subject to a yearly tax bill of £620.
Nevertheless, the changes did not deter motorists from choosing a new electric car during March 2025, which saw a record 69,313 models sold. However, Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT) welcomed the growth in sales, but warned that a lack of Government support could see sales fall.
He added: “A welcome return to growth, and substantial growth at that, is a fillip for the industry. Moreover, with March being the best month ever for electric car registrations, there is reason for optimism.
“Manufacturers remain committed to the market decarbonisation the country and the environment demands, but we need sustained growth, not a short-term bubble driven by unsustainable manufacturer discounting and drivers rushing to beat a tax hike.”
