What's happened
As of December 2025, the UK government is expanding its Electric Car Grant by £1.3bn and adding £200m for charging infrastructure to support EV adoption. This comes amid stalled EV demand due to high upfront costs and plans for a new pay-per-mile tax on EVs from 2028, sparking industry concerns about potential market slowdown.
What's behind the headline?
Government Incentives vs. Taxation
The UK government is walking a tightrope between encouraging EV adoption and addressing fiscal shortfalls caused by declining fuel duty revenues. The £1.3bn top-up to the Electric Car Grant and £200m for charging infrastructure signal strong support for EV uptake. However, the planned 3p per mile tax on EVs from 2028 risks dampening consumer enthusiasm, especially as the market already shows signs of fragility.
Market Dynamics and Industry Response
Automakers face a challenging environment with fluctuating demand and supply chain issues. While EV sales have hit record shares, growth is the weakest in nearly two years. Legacy manufacturers like Ford warn that new taxes could stall progress, while Tesla and Chinese brands like BYD are gaining ground amid shifting consumer preferences.
Infrastructure and Equity Concerns
Charging infrastructure remains a critical barrier, particularly for those without off-street parking. The government’s funding aims to expand access, but rising public charging costs and VAT disparities between home and public charging create inequities. Including EV ownership data in Scotland’s 2031 census reflects a push for better planning and equitable support.
Forecast and Impact
The EV market will likely continue growing but at a moderated pace due to cost pressures and new taxation. The pay-per-mile tax could slow adoption unless balanced by subsidies and infrastructure improvements. Consumers, especially private buyers, may delay switching, impacting manufacturers’ ability to meet zero-emission mandates. Policymakers must carefully calibrate incentives and taxes to sustain momentum toward net-zero goals.
What the papers say
Neil Lancefield in The Independent reports that November 2025 saw a modest 3.6% year-on-year increase in pure battery electric car registrations, the smallest growth since late 2023, with overall new car registrations falling 1.6%. Mike Hawes of the SMMT warns that the new EV tax risks undermining demand just as manufacturers prepare new models. Reuters highlights the upcoming pay-per-mile tax from 2028, introduced by Chancellor Rachel Reeves to offset lost fuel duty revenue, noting industry concerns about its impact on EV uptake. Business Insider UK details automakers' struggles amid policy shifts and supply chain issues, with some scaling back EV ambitions and focusing on hybrids or combustion engines. The Guardian and Sky News cover the government's £1.5bn package to extend EV grants and accelerate charging infrastructure rollout, while also reporting criticism of the new EV taxation and rising congestion charges in London. Consumer Scotland advocates including EV ownership in the 2031 census to better plan infrastructure and support equitable access. These sources collectively illustrate a government balancing act between promoting EV adoption and managing fiscal realities, amid industry and consumer apprehension.
How we got here
The UK aims to phase out petrol and diesel car sales by 2030 to meet net-zero targets. Despite government grants and mandates requiring manufacturers to sell increasing shares of zero-emission vehicles, EV demand has slowed due to high costs and infrastructure concerns. The government introduced a pay-per-mile tax on EVs from 2028 to offset lost fuel duty revenue.
Go deeper
- How will the new pay-per-mile tax affect electric vehicle owners?
- What incentives are in place to encourage EV adoption in the UK?
- How are automakers responding to the changing EV market conditions?
Common question
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Will UK EV Support and Tax Changes Impact Drivers?
The UK government is making significant moves to support electric vehicle adoption, including boosting subsidies and expanding charging infrastructure. However, proposed new taxes like pay-per-mile schemes and congestion charge hikes are stirring debate. Curious how these changes will affect you? Below are the key questions and answers about the UK's evolving EV policies and future tax plans.
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Will UK EV Policies Help the Environment and Drivers?
The UK government is ramping up support for electric vehicles with increased subsidies and expanded charging infrastructure. However, new taxes like pay-per-mile schemes and congestion charge hikes are stirring debate. How will these policies impact the environment, driving costs, and the future of EV adoption? Below, we explore the key questions and what they mean for drivers and the planet.
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What Is the Future of Car Taxes and Congestion Charges in the UK?
With the UK considering new car taxes like pay-per-mile schemes and increasing congestion charges, many drivers are wondering how these changes will affect them. Will these policies make driving more expensive? How will they impact city traffic? Here’s what you need to know about the future of car taxes and congestion charges in the UK, and what it means for everyday drivers.
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How Much Is the UK Investing in EV Infrastructure?
The UK government is ramping up its investment in electric vehicle (EV) infrastructure to support the country's push towards net-zero emissions by 2050. With plans to increase subsidies and expand charging networks, many are wondering how much funding is being allocated and what it means for EV adoption. Below, we explore the details of the UK's EV investment, the impact of subsidies, and how this compares internationally.
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What Do Critics and Supporters Say About UK EV Policies?
The UK government is ramping up support for electric vehicles with increased subsidies and expanded charging infrastructure. However, proposed taxes like pay-per-mile schemes and congestion charge hikes are stirring debate. Curious about how different groups view these policies? Below, we explore the perspectives of environmental advocates, drivers, industry leaders, and the potential impact on EV adoption.
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How Will UK’s New EV and Tax Policies Impact Your Future Travel?
The UK is rolling out significant changes to its electric vehicle support and taxation policies. With increased subsidies and expanded charging infrastructure, EV adoption is set to rise. However, new taxes like pay-per-mile schemes and congestion charge hikes are stirring debate. Wondering how these policies will affect your daily commute, vehicle choices, and even other countries' EV strategies? Read on to find out what these changes mean for you and the future of travel in the UK.
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What Are the Latest Changes to Europe's Electric Vehicle and Tax Policies?
Europe is currently undergoing significant shifts in its approach to electric vehicles (EVs) and taxation. Governments are boosting support for EV adoption while also exploring new ways to fund infrastructure and public services through taxes. If you're wondering how these changes might affect you—whether you're an EV driver, a policy watcher, or just curious about Europe's green transition—this page covers the key questions and answers about the latest policy developments.
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Why Is the UK Electric Vehicle Market Slowing Down Now?
The UK EV market has experienced a slowdown recently, raising questions about what's causing the shift. From policy changes to economic pressures, many factors are influencing EV sales and industry strategies. Curious about what's happening and what the future holds? Below, we explore the key reasons behind the slowdown and what it means for consumers and automakers alike.
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What Do UK EV Subsidies and Future Taxes Mean for Drivers?
The UK is making big moves to support electric vehicle adoption with increased subsidies, but new taxes and policies are raising questions for drivers. How will these changes impact the cost of owning an EV, and what does it mean for the country's climate goals? Below, we explore the key questions about UK EV subsidies, upcoming taxes, and what the future holds for electric car owners.
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Why Are UK EV Sales Still Growing Despite Falling Overall Car Sales?
The UK electric vehicle market is showing signs of resilience even as overall new car sales decline. This paradox raises questions about what’s driving EV adoption, how government policies are influencing the market, and what challenges lie ahead. Below, we explore the key factors behind this trend and answer common questions about the future of EVs in the UK.
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What Are the Biggest Challenges Facing Electric Vehicles in 2025?
Electric vehicles (EVs) are transforming transportation, but their adoption faces several hurdles in 2025. From market demand to government policies, understanding these challenges helps consumers and industry players navigate the future of electric mobility. Below, we explore the key obstacles and opportunities shaping EV growth today.
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How Is the UK Supporting Electric Vehicle Adoption in 2025?
The UK is making significant moves to promote electric vehicle (EV) adoption, including boosting grants and expanding charging infrastructure. However, recent policy changes like new taxes and economic challenges are raising questions about the future of EV demand. Here, we explore how government support, upcoming taxes, and infrastructure developments are shaping the EV market in 2025.
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How Are Global Political and Economic Shifts Affecting Daily Life in 2025?
In 2025, the world is experiencing significant political and economic changes that impact everything from car markets to regional stability. People are asking how these shifts influence their daily lives, future plans, and the global economy. Here, we explore the latest developments, including government policies on electric vehicles, rising tensions in the Middle East, and how international conflicts shape markets worldwide. Read on to find answers to your most pressing questions about today’s news and what it means for you.
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