Octopus vows to ‘fully protect’ thousands of UK drivers from new pay-per-mile car tax changes

Chancellor Rachel Reeves confirmed the rollout of pay-per-mile car tax changes in the recent Autumn Budget following weeks of speculation about the new road pricing measures.

From 2028, electric car owners will be required to pay three pence per mile, while hybrid vehicle drivers will be charged 1.5p per mile.

However, Octopus EV confirmed that it will protect customers from the new car tax change until the end of their lease if they completed an order by November 28.

An estimated 20,000 drivers are set to benefit from the new pledge, with Octopus EV stating that motorists would be protected from “surprise costs”.

The Chancellor said the new Electric Vehicle Excise Duty (eVED) was necessary to ensure all road users contribute to their use of the road network across the UK.

The measure is expected to double road maintenance funding in England over the course of this Parliament.

READ MORE: Pay-per-mile car taxes confirmed for millions of drivers as Rachel Reeves unveils major changes

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Gurjeet Grewal, CEO of Octopus Electric Vehicles, said it was fair for all drivers to pay for their use of the roads. Despite this, he acknowledged that this should be done “fairly and at the right time”.

He continued, saying: “Until the details are finalised, we want our existing customers to know they won’t be affected.

“They made the switch early, and we’re rewarding that commitment by absorbing the new tax and keeping their costs steady.”

The eVED charge will be paid by drivers alongside the existing Vehicle Excise Duty charge, which was introduced for motorists in April earlier this year.

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Labour said the measure was designed to help account for the dwindling revenue from fuel duty as Britons gradually ditch petrol and diesel cars in favour of EVs.

Octopus EV noted that it was “closely monitoring” the Government’s consultation process on the introduction of the eVED tax from 2028.

The consultation, which ends in March, will hear from drivers, manufacturers and the wider electric vehicle industry on how the charge will be introduced and how it will work in practice.

The 26-page document outlines potential solutions for the viability of eVED, including mileage readings, payment methods, insurance implications and a possible link with regular MOT tests.

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Commenting on the consultation, Mr Grewal said drivers shouldn’t have to “wade through new forms or fiddle with extra mileage”, adding that it should be simple for motorists to adhere to the rules.

“We’ll be contributing to the Government’s consultations on their new tax rules to help ensure they’re fair and easy for drivers to navigate,” Mr Grewal added.

Alongside the eVED announcement, Rachel Reeves also unveiled a huge £1.5billion funding boost for EVs, headlined by the Electric Car Grant receiving a further £1.3billion.

More than 40,000 drivers have already made use of the ECG in recent months, with over 40 models included in the incentive scheme from some of the most popular brands in the UK.

Eight vehicles are eligible for the maximum £3,750 tier of the ECG, including the Citroen e-C5 Aircross Long Range, Ford E-Tourneo Courier, Ford Puma Gen-E, Mini Countryman Electric, Nissan Leaf, Renault 4, Renault 5 (52 kWh), and the Renault Alpine A290.

Labour also pledged £200million in funding for the acceleration of electric vehicle charger installations, boosting confidence for motorists without access to a home charger.

The CEO of Octopus EV said the Government was sending a “clear signal” that electric vehicles remain a clear priority.

He said the UK had a “real opportunity” to push forward with the EV revolution, especially as demand falters across Europe.