Pay-per-mile road tax raises a ‘postcode penalty’ worry

June 10, 2026

Looking ahead, the Government’s planned pay-per-mile charge for electric and plug-in hybrid vehicles, known as eVED, is the policy to watch. A plug-in hybrid (PHEV) pairs a petrol or diesel engine with a battery charged from the mains. Coverage warns of a ‘postcode penalty’, with rural drivers potentially facing annual bills that eclipse those in central London, because they cover far more miles.

The scheme is expected around 2028, and the uncertainty is already biting, with research suggesting that mixed government messages are dampening fleet appetite for going electric.

This sits alongside the zero-emission vehicle (ZEV) mandate, the rule requiring carmakers to sell a rising share of pure-electric models each year. For 2026, that means 33% of new cars and 24% of new vans, climbing to 80% of cars by 2030 and 100% by 2035.

Manufacturers are arguing that the targets rely on heavy discounting, the total of which reached around £5bn last year for vehicle makers to pay.

The practical takeaway is to build flexibility into multi-year plans, and to treat today’s electric vehicle running-cost savings as something to bank now rather than assume they’ll continue indefinitely.