Are Electric Vehicles Exempt from Congestion Charge & Road Tax?

If you are considering an EV in the UK, two questions about running costs come up very quickly: are electric vehicles exempt from the congestion charge, and are electric vehicles exempt from road tax? The answers changed significantly in 2025, and a lot of information still circulating online reflects the old rules rather than what is actually in force today. This guide sets the record straight with the current figures so you can plan your costs accurately.

Are Electric Vehicles Exempt from the London Congestion Charge?

The short answer is no, not anymore. Electric cars are no longer fully exempt from the London Congestion Charge. From 25 December 2025, most electric vehicles must pay the congestion charge when driving in central London. This is a significant change from the previous position, where EVs received a 100 percent discount through the Cleaner Vehicle Discount scheme.

The standard daily charge is now £18 if paid on the day of travel or in advance, rising to £21 if paid within three days after travel. This applies to battery electric vehicles as well as electric vans.

The reason for the change is straightforward. When the Cleaner Vehicle Discount was introduced in 2018, it came with a clear expiry date of 25 December 2025. The number of vehicles registered for the discount grew from around 20,000 in 2019 to over 112,000 by June 2024, a growth rate of more than 460 percent. As EV numbers grew, maintaining the exemption would have undermined the congestion charge’s core purpose of reducing traffic volumes.

However, there is an important distinction to understand. The congestion charge and the Ultra Low Emission Zone are separate schemes. Electric vehicles remain completely exempt from ULEZ charges indefinitely. This exemption applies across all of Greater London, 24 hours a day, seven days a week. So while you now pay the congestion charge, you still avoid ULEZ costs entirely.

Are Electric Vehicles Exempt from Road Tax in the UK?

No. Free road tax for electric vehicles was abolished on 1 April 2025. This change applies to both new and existing electric vehicles. For most of the history of consumer EVs in the UK, electric vehicles paid no Vehicle Excise Duty because their zero tailpipe emissions placed them in the lowest VED band. That changed when the government decided it was no longer fair to exempt EV drivers from a charge that ICE vehicle owners must pay.

• Registered on or after 1 April 2025: New zero emission cars pay the lowest first year VED rate of £10. From the second year onwards, the standard rate of £195 per year applies.
• Registered between 1 April 2017 and 31 March 2025: These vehicles pay the standard VED rate of £195 per year from April 2025.
• Registered between 1 March 2001 and 31 March 2017: These older EVs moved from Band A to Band B, which is £20 per year.

If your EV has a list price above £50,000, an Expensive Car Supplement applies. The threshold for zero-emission vehicles was increased from £40,000 to £50,000 in November 2025. For those above the threshold, the supplement adds £440 per year for five years from the second year of registration, bringing the total to £640 per year for that period.

What Is eVED? The Coming Pay-Per-Mile Charge for EVs

Beyond the existing VED changes, the UK government has announced a new mileage-based charge for electric vehicles that will come into force from April 2028. Known as eVED, this will be an additional charge on top of standard VED, costing 3 pence per mile for EVs and 1.5 pence per mile for plug-in hybrids. An average EV driver covering 8,500 miles annually will pay approximately £255 per year in eVED from 2028, bringing total annual motoring tax to around £455 including standard VED.

It is worth noting that even with eVED, EV running costs remain significantly lower than petrol equivalents when you factor in the difference in fuel costs. The shift is more about fairness in road funding contributions than a fundamental change to the economic case for EVs.

Are EV Salary Sacrifice Schemes Worth It?

Given the new congestion charge and road tax costs, salary sacrifice schemes deserve particular attention for drivers who use their vehicle in London or who drive high mileages. Electric cars through salary sacrifice schemes remain highly cost-effective for London drivers, with savings of 20 to 50 percent and a Benefit-in-Kind tax rate of just 3 percent in 2025 and 2026.

Under a salary sacrifice arrangement, your employer leases an EV and you give up a portion of your pre-tax salary to pay for it. The savings come from paying for the car before income tax and National Insurance are calculated, which significantly reduces the effective cost. The Benefit-in-Kind rate for electric vehicles is currently protected at very low levels until at least 2030, which makes the scheme particularly attractive compared to petrol or hybrid alternatives.

Are EV Tyres More Expensive?

EV tyres do tend to cost more than equivalent tyres for petrol cars, and there are two main reasons. First, EVs are heavier than equivalent petrol cars because of the battery pack. That extra weight increases the demands on tyres and means tyres designed for EVs need to be more robust to handle it safely. Second, the instant torque delivery of an EV motor puts greater stress on the tyre contact patch during acceleration, which can increase wear rates.

EV-specific tyres tend to carry a premium of roughly 10 to 30 percent over standard tyres of the same size. The practical impact on your annual budget depends heavily on how much you drive and which EV you own. For most average-mileage drivers, tyre costs are a manageable part of overall ownership rather than a significant deterrent.

Are Electric Vehicles Manual or Automatic?

All electric vehicles are automatic. There are no gears to change in an EV and no clutch pedal because electric motors do not need a gearbox in the way combustion engines do. An electric motor delivers power across its full operating range through a single-speed reduction gear, so there is nothing for a driver to shift.

This is one of the reasons many drivers find EVs easier and less tiring to drive in urban conditions. Stop-start city driving, which involves constant clutch operation and gear changes in a petrol car, becomes much simpler in an EV. If you currently hold only a manual driving licence in the UK, you can legally drive an electric vehicle because all EVs are automatic.

What This Means for You

If you drive regularly in central London, the end of the congestion charge exemption adds a real cost to EV ownership that you need to factor into your running cost calculations. At £18 per day, it is a significant daily expense for frequent London drivers. ULEZ exemption remains, which continues to save you money compared to older petrol and diesel vehicles, but the two schemes are no longer equivalent in their treatment of EVs.

On road tax, the change from April 2025 means no EV owner can assume free VED any longer. The standard £195 annual rate applies to most EVs, with the first year at just £10 for newly registered vehicles. The overall running cost picture for EVs remains significantly more favourable than petrol equivalents when you account for home charging costs, but the era of zero tax and zero congestion charge for EVs in the UK is over. Planning your costs accurately from the start is the best way to make sure your EV ownership experience lives up to its financial promise.