UK Announces New Taxes on Electric Vehicles

Starting April 2025, electric vehicle (EV) owners in the UK will face significant tax changes, including the introduction of a flat £190 road tax, previously exempted for EVs. Additionally, a new £2,125 luxury vehicle tax will be applied to electric cars priced above £40,000, impacting a majority of new EV purchases due to high prices. This levy, known as the expensive car supplement, will add a yearly surcharge of £425 from the second to sixth year of a vehicle's lifespan. The government argues these changes are necessary to ensure a fair tax system for all motorists and to address potential revenue losses from increasing EV adoption. Critics, including tax experts, warn that these increases could undermine the UK's net-zero goals by discouraging the purchase of greener vehicles. As a result, about 67% of electric vehicles sold in the UK may incur the new luxury tax, raising concerns about the financial burden on consumers.