Drivers of some family vehicles face higher bills due to new tax changes scheduled for April 2025. The changes will leave drivers of some cars £600 out of pocket – and quite surprisingly, electric vehicles are not spared.
Labour may be championing lower bills for eco-friendly rides, but hybrid owners could be about to see an extra £135 to £327 tax hit depending on their model, while those purchasing battery electric vehicles (BEVs) face a more modest increase of just £10 according to the Vehicle Excise Duty (VED) rates. Yet come April, electric car lovers who’ve splashed out over £40,000 on their vehicle will have to start paying even more due to the ‘Expensive Car Supplement’.
The current exemption from the Expensive Car Supplement for electric cars is set to expire in 2025, as highlighted by the RAC. From then on, any new zero emission cars registered from 1 April 2025 will be subject to the Expensive Car Supplement (ECS).
At present, this involves coughing up an additional £410 annually if your car’s price tag exceeds £40,000, applicable for five years. This could mean that EV drivers with pricier models will fork out as much as £600 a year in road tax, potentially deterring buyers.
Erin Baker, editorial director at Auto Trader, commented on the potential impact: “While the ECS hasn’t significantly affected petrol or diesel car sales, the landscape may change for electric vehicles.
“With two-thirds of EVs priced over £40,000, the additional road tax could make them less appealing. However, leasing offers a practical solution. The ECS is automatically incorporated into the monthly payments, making it simpler for drivers to manage the added costs.”
Lancs Live reports that several popular family EVs will be affected. These include the £62,775 Kia EV9, the £59,035 Volkswagen ID Buzz, and the £43,325 Kia EV6, as well as the £60,178 BMW iX, the £61,016 BMW i5, the £46,990 Tesla Model Y, the £49,295 Volkswagen ID3, and the £42,445 Kia Nero EV.
Tom Banks, a car insurance expert at Go. Compare, offered advice in light of the increased Vehicle Excise Duty (VED) rates set for 2025: “The increased VED rates mean most new car buyers will be paying a lot more than they were expecting in 2025, but there are ways you can minimise the impact this will have on your finances. For instance, consider purchasing a low-emissions car that will place your vehicle in the cheaper tax bands.”
He also suggested: “If you can’t purchase a suitable hybrid or EV, consider opting for a nearly new vehicle instead. This gives you that new car feeling for a fraction of the price, and will allow you to dodge the increased tax.”
He also recommended that drivers explore additional measures to cut costs, advising: “Otherwise, see if there are any other ways you can reduce your motoring spending to makeup for the increased tax costs. For example, comparing car insurance policies might allow you to find a provider that offers the same level of cover for a lower price, and driving in a way that minimises your fuel usage could help to reduce costs further.”