Hybrid Vehicles: Excise Duties
The question
To ask the Chancellor of the Exchequer, whether the proposed Electric Vehicle Excise Duty pay per mile charge for plug in hybrid vehicles will apply only to the mileage driven using electric power, or to the vehicle’s total mileage.
Answered by Dan Tomlinson
Electric and plug-in hybrid (PHEV) cars will be in scope of electric Vehicle Excise Duty (eVED) on the basis they can be plugged in to charge, where the electricity input is not subject to a fuel duty equivalent.
PHEVs have the capacity to drive in either electric or petrol mode and will continue to pay fuel duty on miles driven in petrol mode. In recognition of this, they will be subject to a reduced eVED rate of 1.5 pence per mile upon its introduction in April 2028 – half the rate of 3 pence per mile that will apply to fully electric cars.
The government recognises that PHEV driving habits vary and that some motorists will drive more or less than 50% in electric mode. However, alternative options would require motorists to report their exact mileage driven in petrol versus electric mode, which is not considered a practical or proportionate approach. A reduced rate for PHEVs strikes the right balance between fairness, protecting motorists’ privacy and minimising administrative burdens on motorists.
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