In the wake of a road tax hike early this year, Chancellor Rachel Reeves appears to be firing up the engine for a new pay-per-mile tax for electric vehicles in this month's budget on November 26.

The likely average cost for EV drivers from any such broadside move by Westminster suggests that they would need to stump up a new average budgetary cost of £250 per year for their choice of green wheels.

Company car drivers covering 20,000 miles a year would face a £600 bill, while for anyone in business driving an average 1,000 a month, the damage would be £360.

Despite cynicism in some quarters of the auto industry that the news broken by the Daily Telegraph today is unsubstantiated, the BBC quoted a Whitehall source as stating: "Fuel duty covers petrol and diesel, but there's no equivalent for electric vehicles. We want a fairer system for all drivers."

Under any such the plan announced on 26 November, EV drivers would face a new charge of 3p a mile on top of other road taxes to offset falling revenue from petrol and diesel cars as drivers switch to fossil-free motoring options. It is calculated that the contribution from EV drivers caught in the new tax net would generate £1.8bn for the Treasury coffers by 2031.

The obvious fiscal temptation for a government struggling to balance the books lies in basic arithmetic: there are currently some 1.7m battery-only electric vehicles (BEVs) out on UK roads, with around 5% of the total vehicle parc being electric.

Furthermore, that number is growing fast, with graphs reflecting a near exponential rate of demand. Indeed, according to the Society of Motor Manufacturers and Traders (SMMT), BEV uptake is accelerating to the degree that in the latest (October 2025) figures, this powertrain was the only one to show growth.

That rate of transition is seen as pivotal for the UK to meet its legally binding commitment to achieving zero greenhouse gas emissions by 2050, as set by the 2008 Climate Change Act. At the same time, as enforced through a Zero Emission Vehicle (ZEV) mandate, the government's EV target is to achieve 100% of new car and van sales being zero-emission by 2035.

The suggestion has offered an immediate open goal for government critics. Former Forest of Dean MP Mark Harper, now sitting in the House of Lords, said the idea was "another Labour tax on working people."

Baron Harper added: "Particularly hits those in rural areas who depend on their car. Conservatives said we would not introduce pay per mile road pricing. As Rishi Sunak said "Your work, your car, your pension. You name it. Labour will tax it"."

But the idea has also generated immediate criticism from within the car industry. The SMMT has already warned that any new tax measures will threaten to hold back Britain's automotive industry, from the factory floor to showrooms and aftersales.

And attendant green business says it would also reel from a tax stick at a time when it is crying out for carrots.

David Watson, CEO of British car charger maker Ohme, which is the UK's largest home EV charging company, told Punchline-Gloucester.com: "New EV car sales accounted for more than one in four of all cars leaving showrooms in October, but that is still dominated by business drivers and the sales growth for EVs among retail customers remains fragile."

He added: "Rather than encouraging that and continuing to drive that growth forward, any increase in taxation for EV drivers at present will only have the effect of pulling on the handbrake for EV sales, cleaner transportation and improved air quality for all."

Ian Robertson, Editor of Diesel and Eco Car magazine, also warned that the Treasury and Department of Transport could face an administrative headache: "The sticking point all over this is how they would measure it on cars up to three years old. The could measure between MOTs for older vehicles, but from year zero until year three how do they get the mileage readings?"

Having spoken to various key sources in the industry, Mr Robertson said he remained unconvinced that the measure would emerge from the Chancellor's red briefcase later this month.

He added: "This just goes against everything that EV drivers have become accustomed to."