The Treasury is considering a package of measures to reduce the cost of public electric vehicle charging, amid concerns that the new ‘pay-per-mile’ road tax could deter drivers from switching to EVs.
Reports suggest that Chancellor of the Exchequer Rachel Reeves is exploring ways to offset the impact of the 3p-per-mile road tax on EVs, announced in the Autumn Budget and due to take effect from April 2028. The Office for Budget Responsibility has warned the levy could result in 440,000 fewer EV sales unless mitigating policies are introduced.
Among the proposals under consideration is the long called-for reduction in VAT on public EV charging from 20% to 5%. Such a move would bring public charging in line with the domestic electricity rate paid by motorists who can charge at home, removing what campaigners have dubbed the ‘pavement tax’ faced by drivers without driveways.
Officials are also examining how to reduce ‘network charges’ paid by charging point operators to the National Grid. These charges have risen sharply in recent years and now account for a significant proportion of the cost of public charging.
In addition, the government is reviewing how standing charges for public charge points are calculated, following reports that annual costs at some sites have increased from under £100 to as much as £40,000 following recent changes to charging methods.
The proposals form part of a wider review of public EV charging costs, scheduled to begin in the first quarter of 2026, with findings expected later in the year. The Chancellor has also pledged an additional £200 million for charging infrastructure, with a target of 300,000 public chargers by 2030.
Other measures already announced include a 10-year, 100% business rates relief for eligible EV-only forecourts and public charging networks, and a consultation on allowing cross-pavement charging gullies to help households without off-street parking access cheaper domestic electricity.
In response to this speculation, Antoine Picron, Director, Europe Public Policy at ChargePoint, said: ‘The media reporting that the UK Chancellor of the Exchequer is considering action to reduce the costs of public electric vehicle (EV) charging, including a potential cut to VAT, would be a very welcome step if taken forward.
‘For drivers weighing up the switch to an EV, upfront and running costs remain a major factor, particularly in the context of ongoing cost of living pressures and recent proposals to introduce pay-per-mile charging only for EV drivers.
‘It is telling that the average car on UK roads is now 9.5 years old, the oldest on record. This points to consumers delaying decisions, and highlights the need to rebuild confidence in the transition to EVs. The charging sector is investing heavily to expand and improve public infrastructure. For the UK to accelerate EV adoption, government action on availability and affordability will be an essential part of these efforts.’
Photo: JUICE / Unsplash
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