The electric car grant has been extended to 2030, with an additional £1.3m of funding made available, according to the trade association NAPIT's response to the Chancellor's Budget, published on 27 November 20251. A further £200m has been committed to accelerate the electric vehicle chargepoint roll out1. The same Budget set out a new pay-per-mile charge for electric and plug-in hybrid cars from April 20282.
The grant extension and the mileage charge were announced together, and the two measures pull in different directions. NAPIT, a certification body and trade association, said the Budget was "full of mixed messages and missed opportunities to create growth in the green economy and low carbon sector"1. Its director of commercial and compliance, Stephen Melton, said the grant extension applied only to new cars.
"It is good news that the electric car grant has been extended but this is only for new cars so won't impact the second-hand market."
The mileage charge applies from April 2028 at 3p per mile for battery-electric cars and 1.5p per mile for plug-in hybrids, on top of existing Vehicle Excise Duty2. Electric vans, trucks and motorcycles will initially be exempt2. The distributor Sevadis, which published its own summary on 7 November 2025, set out the annual cost at different mileages2:
| Miles per year | Battery-electric (3p) | Plug-in hybrid (1.5p) |
|---|---|---|
| 5,000 | £150 | £75 |
| 8,000 | £240 | £120 |
| 11,000 | £330 | £165 |
| 15,000 | £450 | £225 |
| 20,000 | £600 | £300 |
Sevadis gives a typical driver at 8,000 to 8,500 miles a year a cost of around £240 to £260 annually, and notes petrol fuel duty averages 6 to 7p per mile2. It reports that the government consultation suggests drivers estimate annual mileage when renewing VED, with mileage checked annually through MOT records or annual checks for newer vehicles, and any difference reconciled at year end, a system it says avoids live tracking2. The Office for Budget Responsibility estimates the new tax replaces only around 25% of lost fuel duty by 2050, and around 440,000 fewer electric vehicle sales over the forecast period2.
The two sources differ on the size of the grant funding. NAPIT states an additional £1.3m1; Sevadis states £1.3bn2. Sevadis also states the grant runs to 2029-30 and that eligible vehicles can receive up to £3,750 off list price, with the new Nissan LEAF confirmed as eligible2. NAPIT states the extension runs to 20301. The Expensive Car Supplement threshold for electric vehicles rises from £40,000 to £50,000 from April 20262.
Why it matters for households
For a household weighing up an electric car, the grant reduces the upfront price of a new vehicle, but the mileage charge adds a running cost from 2028 that scales with how far the car is driven. A low-mileage household pays relatively little; a high-mileage commuter pays several hundred pounds a year. Because the grant applies only to new cars, households buying used are not affected by that part of the announcement1. The £200m for chargepoints concerns the infrastructure a household relies on when charging away from home1. NAPIT also notes average household energy bills are expected to fall by an estimated £150 a year, paid for by cutting the ECO scheme and removing other costs from bills1, which affects the grants and schemes landscape for home energy improvements rather than motoring.
What happens next
The Expensive Car Supplement threshold change takes effect from April 20262. The pay-per-mile charge begins in April 20282. NAPIT states that details of the government's Warm Homes Plan and Future Homes Standards are still awaited and expected before the end of the year1. The consultation on how mileage is collected proposes annual mileage estimates at VED renewal, with reconciliation at year end2.