How much is car tax on an electric car?

The exemption ended, it was not replaced

Until 31 March 2025 a battery electric car paid no vehicle excise duty at all. From 1 April 2025 the exemption was removed rather than swapped for a lower electric rate, so electric cars are now taxed by exactly the same three systems as everything else.

Which system applies is decided by the date of first registration, and nothing about the fuel changes that. A car registered from April 2017 pays a first year rate and then the flat standard rate. One registered between March 2001 and March 2017 pays by lettered CO2 band. One registered before March 2001 pays by engine size, which no electric car of that era would have.

The practical effect is that the answer to what an electric car pays depends on when it was registered, in the same way as it does for a petrol one.

• Registered from 1 April 2025: a £10 first year rate, then the standard rate.
• Registered 1 April 2017 to 31 March 2025: the standard rate, and no supplement whatever the list price was.
• Registered 1 March 2001 to 31 March 2017: the band B rate, which is lower than the standard rate.

The first year rate is the one place CO2 still matters

A new electric car pays £10 for its first licence, which is the lowest figure in the first year table. A petrol car emitting 130 g/km pays several hundred pounds for the same twelve months, and one emitting over 255 g/km pays several thousand.

That gap is now the only place in vehicle excise duty where the CO2 figure changes what a driver pays. From the second licence onwards every car in that system pays the same flat rate whatever it emits.

It is also usually invisible, because a dealer registers and taxes a new car before handover, so the first year rate is inside the on the road price rather than arriving as a separate bill. On a high emitting car it is the largest line on the invoice after the car itself.

The expensive car supplement, and the £50,000 threshold

The expensive car supplement is charged on top of the standard rate for five years, running from the start of the second licence, where the car's list price when new was above a threshold. It is based on the published list price rather than on what was paid, so a discount cannot get a car under the line and factory options can push it over.

For petrol, diesel, hybrid and plug in hybrid cars that threshold is £40,000 and has not moved. For zero emission cars it rose to £50,000 for any licence taking effect on or after 1 April 2026, on the reasoning that electric cars list higher than their petrol equivalents for the same size of car.

The change applies retrospectively, which is unusual for a tax measure. The effect is that most zero emission cars registered from 1 April 2025 are not required to pay the charge at all, and a zero emission car that took out a second licence before 1 April 2026 pays one year of it and nothing after that.

• £40,000 threshold for petrol, diesel and hybrid cars.
• £50,000 threshold for zero emission cars, for licences taking effect from 1 April 2026.
• Payable for five years from the start of the second licence, on top of the standard rate.
• The list price is the published price including delivery and factory options, before any discount.

Older electric cars are not all on the standard rate

An electric car first registered between March 2001 and March 2017 sits in the lettered band system rather than the flat rate one. Zero emissions puts it in band A, and band A stopped being free on 1 April 2025, so it now pays the band A figure, which is the same as band B.

That is a lower number than the standard rate, and it catches people out in the opposite direction: owners of early electric cars sometimes assume they are on the same figure as a modern one and budget too much.

An electric car registered between April 2017 and March 2025 pays the standard rate and no supplement at all, whatever its list price was when new. The supplement only reaches zero emission cars registered from April 2025 onwards.

Where the electric advantage actually survives

On vehicle excise duty it does not. An electric car and a petrol car of the same age pay the same standard rate, and the £10 first year rate is a one off worth a few hundred pounds at most against a mainstream petrol equivalent.

On company car tax it survives in full. HMRC charges a zero emission company car at a small single figure percentage of its P11D value where a petrol car of the same price is charged at four or five times that, and the schedule keeps electric well ahead into the end of the decade.

On running costs it survives where you can charge at home. At a domestic unit rate an electric car costs a fraction of a petrol equivalent per mile. Charged on a public rapid charger it costs about the same, which is why the saving depends more on where you park than on which car you bought.