How Much Will Electric Car Tax Be in 2025? 6 FAQs Answered

Are you wondering how much will electric car tax be in 2025?

Well, from April 1, 2025, all-electric vehicles (EVs) will be subject to Vehicle Excise Duty (VED). This will end the years of tax-free benefits for EV owners. However, there is a lot of confusion around the new road tax calculations.

Don’t worry! This guide breaks down everything from VED for EVs in 2025 to tax for those registered previously.

So, without any further ado, let’s get started!

1. How Much Will Electric Car Tax Be From April 1, 2025?

Starting April 1, 2025, electric vehicles (EVs) will no longer be exempt from Vehicle Excise Duty (VED). Instead, they’ll be subject to road tax just like the petrol and diesel vehicles.

Here’s how it breaks down:

• In the first year, newly registered EVs will pay a £10 Showroom Tax. This is a small initial fee that applies to all cars, regardless of their fuel type.
• From the second year onwards, electric cars will be charged the standard rate of £195 per year.

However, if your EV has a list price of over £40,000, you’ll also need to pay the Expensive Car Supplement (ECS). This adds an extra £425 per year for the first five years. An EV priced over £40,000 may very well end up paying £620 per year in road tax (£195 + £425) during this period.

While the tax-free era for EVs is ending, these changes aim to create a fairer system as more drivers switch to electric vehicles.

2. How Much Will Road Tax be for EVs Registered Between 2017 and 2025?

If your electric car was registered between April 1, 2017, and March 31, 2025, you’ll need to start paying road tax from April 2025. But don’t worry; you’ll still get a bit of a break compared to new EV owners.

From April 2025 onward, you’ll pay £20 per year instead of the full standard rate of £190. Plus, even if your EV originally costed over £40,000, you won’t have to pay the Expensive Car Supplement (ECS).

This means if you bought an EV before April 2025, you’ll pay significantly less in road tax compared to those buying new EVs after that date. It is a small win for early adopters of electric vehicles.

3. How Much Will Road Tax be for Older EVs Registered Between 2001 and 2017?

If your electric car was registered between March 1, 2001, and March 30, 2017, the tax rules are a bit different. Unlike newer EVs, these older models are taxed based on their CO2 emissions, just like petrol or diesel cars.

The biggest change for these vehicles is that cars with 0-100g/km emissions, which were previously tax-free, will now pay £20 per year. Most older EVs fall into this category, so while it’s a small increase, it’s still a very low rate compared to traditional cars.

4. How Much Will Road Tax Be for Plug-in Hybrids (PHEVs)?

Plug-in hybrids (PHEVs) are treated differently from fully electric vehicles when it comes to road tax. They’re taxed based on their CO₂ emissions, just like petrol or diesel cars. If your PHEV has a list price over £40,000, you’ll also need to pay the £425 annual Expensive Car Supplement (ECS) for the first five years. 

While PHEVs aren’t as tax-friendly as fully electric cars, they’re still a great option for drivers looking to reduce emissions without going fully electric.

Just check the following CO₂ emissions and list price to estimate your road tax:

• Up to 100g/km: £20 (previously £0)
• 101-110g/km: £20 (no change)
• 111-120g/km: £35 (no change)
• 121-130g/km: £165 (previously £160)
• 131-140g/km: £195 (previously £190)
• 141-150g/km: £215 (previously £210)
• 151-165g/km: £265 (previously £255)
• 166-175g/km: £315 (previously £305)
• 176-185g/km: £345 (previously £335)
• 186-200g/km: £395 (previously £385)
• 201-225g/km: £430 (previously £415)
• 226-255g/km: £735 (previously £710)
• 255+g/km: £760 (previously £735)

5. Will road tax changes affect the resale value of electric cars?

The new road tax rules could impact the resale value of full-sized and small electric cars. Pre-2025 EVs, which will pay just £20 annually starting April 2025, may become more attractive in the used car market. Buyers looking to save on taxes might prefer these older models over newer, higher-taxed EVs.

On the other hand, luxury EVs over £40,000 could see a dip in demand due to the £390 annual Expensive Car Supplement (ECS). Overall, the changes might boost the appeal of affordable, pre-2025 EVs while making high-end models less appealing to budget-conscious buyers.

6. Are there any exemptions or discounts for electric taxis or company EVs?

Yes, there are some exemptions and discounts for specific groups. Electric taxis are exempt from road tax as of now. However, it is most likely to change this year, after which they’ll pay the standard rate. 

For company EVs, businesses can benefit from lower Benefit-in-Kind (BIK) rates and tax relief on charging infrastructure. While road tax applies to all EVs from 2025, these groups still enjoy some financial perks.

Final Word: How Much Will Electric Car Tax Be in 2025? 

Buying an electric vehicle (EV) in 2025 comes with new tax considerations, and failing to understand them could lead to unexpected costs. With Vehicle Excise Duty (VED) for EVs kicking in, it’s crucial to know how much you’ll pay based on your car’s registration date.

To stay ahead, learn about EV tax changes, how the government calculates VED, and ways to minimise your tax bill. By planning wisely, you can still enjoy the benefits of owning an electric car. 

For more expert insights on EV ownership and road tax, check out our latest guides and resources.