An automotive expert has urged drivers thinking about buying an electric car to think twice before getting behind the wheel of a model costing over £40,000. As the DVLA introduces a number of changes to how much tax drivers have to pay, the exemption given to electric car owners has ended.
However, in addition to paying £195 to tax their car, Chris Rosamond, current affairs and features editor for the motoring publication Auto Express noted that 70% of new EVs are subject to another fee. He said: “From tomorrow, electric vehicle (EV) buyers – including those purchasing used EVs first registered after the same date – will face yet another financial hurdle as the so-called ‘luxury car tax’ exemption (Expensive Car Supplement, ECS) ends.
“A Freedom of Information request by Auto Express to the DVLA revealed that almost a third (31%) of cars are already subject to this already excessive additional rate of Vehicle Excise Duty (VED) levied on cars over £40,000 – and that going forward, it will hit up to 70% of new EVs sold.”
Introduced for petrol and diesel models in 2017, the expensive car supplement (sometimes called luxury car tax) is a fee paid on new vehicles that cost more than £40,000 from the second to sixth year it is registered on the UK roads.
The fee currently stands at £425 per year, meaning that new EV buyers who choose a model priced above the threshold will likely pay a total of £620 per year to tax it.
As a result, it is a good idea for drivers interested in buying a new electric car to shop around and find the best model with a retail price of under £40,000, including optional extras such as metallic paintwork.
Chris warned the Government that including electric vehicles in the expensive car supplement will likely be seen as punishing drivers for choosing a zero-emission model, with petrol alternatives usually costing less.
He added: “With private EV uptake already struggling and cost being one of the main deterrents for potential buyers, this change risks slowing adoption at a critical time. The Government should be supporting drivers in making the switch to EVs, not penalising them. More needs to be done to encourage drivers to move to this still-fledgling technology, not give another reason to hold off from making the shift.
“Our data shows that currently, just 19% of UK motorists are ‘very likely’ to consider an EV for their next car, with 57% citing cost as the main issue. Demand is already being pushed more by manufacturers than pulled by consumers as it is, so anything that will make them less attractive to produce is not good for the industry.”
According to figures published by the Society of Motor Manufacturers and Traders (SMMT), 21,244 electric models were sold in the UK during February 2025 – accounting for 25.3% of the new car market.
Whilst the figure is impressive and likely increased during March thanks to the launch of the new number plates, some have warned that the end of tax exemption on EVs will cause demand to slump in the coming months.
A growing number of automotive experts are calling on the Government to raise the expensive car supplement’s threshold to keep in line with inflation or add other incentives to encourage the uptake of EVs.
