Significant changes to Vehicle Excise Duty (VED) have come into effect as of April 1, 2025, impacting electric vehicle (EV) owners across the UK. Previously exempt from VED, EVs registered on or after this date are now subject to a first-year rate of £10, followed by the standard annual rate of £195. Additionally, EVs with a list price exceeding £40,000 are liable for the Expensive Car Supplement, incurring an extra £425 annually from the second to the sixth year of registration.
These adjustments aim to address the growing adoption of EVs and ensure a fair contribution to road maintenance funds. Prospective EV buyers should factor these additional costs into their purchasing decisions, while current owners must prepare for the new tax obligations.
For many drivers considering the switch to electric, these changes might make them think twice. While EVs still offer significant savings on running costs compared to petrol or diesel cars — including lower fuel expenses and reduced maintenance — the introduction of VED charges narrows the gap slightly. This is particularly important for premium EV buyers, as models priced over £40,000 will now face nearly £2,000 in additional tax over five years.
However, it’s worth noting that even with the new VED charges, EVs remain a smart financial choice in the long term. With more affordable finance packages available and increasing access to public charging infrastructure, the overall ownership experience continues to improve.
At Match Me Car Finance, we’re helping customers make informed choices by clearly outlining all costs associated with their chosen vehicle, including VED. We’ll work with you to build a finance plan that balances affordability, sustainability, and convenience.
