The fleet and automotive sector has responded to the Government’s revised 2028 EV pay-per-mile tax plans by welcoming the simplified digital reporting and flexible mileage rules, but reiterating warnings that the added costs from the new tax could severely stall electric vehicle adoption across the UK.

The UK government confirmed yesterday the introduction of a pay-per-mile electric vehicle tax starting in April 2028, but with critical concessions to ease the burden on fleets.

First introduced by Chancellor Rachel Reeves in the 2025 Autumn Budget, the Electric Vehicle Excise Duty (eVED) will charge fully electric cars 3p per mile and plug-in hybrids 1.5p per mile to fill the multi-billion-pound deficit left by declining fuel duty revenues.

Following an intense 16-week public consultation and severe industry pushback regarding an expected £260m annual compliance bill, the Government announced major operational changes.

Officials have completely scrapped the original plan for mandatory physical mileage inspections at local garages for newer, pre-MOT vehicles. Instead, fleet operators are now permitted to provide estimated mileage readings to bypass individual tracking. Companies are also granted the flexibility to make bulk aggregate payments and settle outstanding liabilities with top-up payments before defleeting vehicles. Furthermore, instead of enforcing mandatory tracking devices that raised driver privacy and data security concerns, the Government has committed to exploring the use of connected car data.

The Department for Transport has also said it will maintain an open dialogue with the fleet sector ahead of the 2028 rollout.

Responding to the revisions, Dale Eynon, government affairs and policy lead at the Association of Fleet Professionals (AFP), said: “The AFP has long been concerned that the introduction of eVED could hit fleet operators with a substantial administrative burden, as they try to navigate their way around the complexities of managing the scheme and ensuring full compliance.

“Some of the specific concerns raised during the consultation, such as annual mileage checks and reconciliation of mileage both annually and at the end of the lease, have been addressed by the Government’s announcement and we acknowledge these changes as a positive step forward.

“The promise of further engagement with fleet operators prior to the April 2028 start date will hopefully iron out further issues. However, it currently appears that wholesale revisions to the scheme are unlikely, so our advice to the fleet community is to prepare for the extra workload eVED will generate.

“We will, of course, continue to aim for further changes to the current proposals as well as pushing for a delay in implementation until at least 2030, when the electric car market will have further matured.”

Toby Poston, BVRLA chief executive, said: “It is great that the Government has taken some of the roughest edges off its eVED plans. They’ve accepted that a tax designed around private motorists won’t work for the fleets that are driving the UK’s transition to electric vehicles.

“But there is no avoiding the fact that you can’t create a smooth switch to electric vehicles by making them more expensive to own. The mechanics of the tax may have improved, but the timing is still wrong.”

Fleet Operations also welcomed the changes but expressed continued concerns about the impact of the new tax.

David Bushnell, director of consultancy and strategy, said: “The Government’s decision to introduce specific eVED arrangements for fleets is a welcome acknowledgement that a system designed around individual motorists would not work for businesses operating vehicles at scale.

“Allowing fleets to provide central mileage estimates, make aggregate payments and settle liabilities before defleeting should reduce some of the administrative burden.

“The proposed API and web interface are also sensible, provided they are thoroughly tested and supported by clear guidance ahead of April 2028.

“These changes, however, address the mechanics of the tax rather than its wider impact. At 3p per mile, a fully electric car covering 20,000 miles a year would attract an annual charge of £600, which fleets will need to build into whole-life cost calculations.

“The cost will also be felt by employees who have moved from privately owned cars into electric vehicles through salary sacrifice schemes, including many public-sector workers. While we recognise the principle that those who drive more should contribute more, the timing risks causing some employees considering salary sacrifice to delay making the switch.

“This could create a pause in EV uptake at a time manufacturers face increasingly demanding ZEV mandate targets. Drivers and fleets must also understand that the 3p rate will not remain fixed, with increases in line with CPI planned from 2029-30.

“The Government must now work closely with the fleet industry to ensure eVED does not create unnecessary friction or weaken the business case for electrification.”

FleetCheck CEO Peter Golding supports the Government’s practical adjustments to eVED rules, noting they will ease the transition for commercial fleets. However, he maintains that the broader push for electric vehicle adoption is happening too quickly for both businesses and everyday drivers.

Golding added: “It doesn’t change the core objection that the whole idea is probably just too much, too soon when it comes to electrification for both fleet and private buyers. Just at the point in time when electric cars should be starting to feel like the natural choice for buyers, this is unwelcome expense and complication.”

Within the used vehicle sector, Philip Nothard, chair of the Vehicle Remarketing Association (VRA), said: “Our view remains that this is the wrong policy at the wrong time. Electric cars are gaining a foothold in the used sector but many buyers remain cautious and eVED delivers a massive disincentive in terms of the whole mileage-based principle with the cost and complication that it brings. It really could severely damage the EV market just at the point when it should be gaining momentum.

“The only real positive here is that the government has tried to make changes in response to motor industry objections but really, the situation is no better than before. The new measures raise more questions than answers in terms of handling of sub-three year old vehicles, the risk of increased mileage fraud, change of ownership, insurance write-offs, repossessions and more. Processing and management of the whole eVED system remains fraught with difficulties.

“We recognise the taxation advantages that have been used to incentive electric car adoption can’t stay in place forever but the timing and policy here are misguided.”

Meanwhile on the automotive retail side, the Institute of the Motor Industry (IMI) warned that a critical delivery risk remains unresolved: the assumption that every MOT garage will be equipped to deal with EV mileage anomalies.

The IMI’s Consultation submission supported the principle of a mileage-linked model, but stressed that implementation must reflect real-world workshop capability, EV technical complexity, odometer discrepancies, diagnostic access issues and workforce capacity constraints.

Nick Connor, CEO of the IMI, said: “The consultation outcome shows the Government has genuinely listened to the automotive profession. Ruling out mandatory telematics, building eVED into the existing VED and DVLA systems, anchoring mileage validation in the MOT, and committing to simple reconciliation and sensible arrangements for fleets and lifecycle events are all things the IMI called for. That is a pragmatic foundation, and we welcome it.

“However, there is one big question the response does not yet answer: can eVED be delivered safely and consistently if the system assumes every MOT garage can deal with EV mileage anomalies? The risks around odometer tampering, mileage data being held in more than one place in a vehicle, and the central role MOT garages will play in recording mileage have been recognised in the consultation response, yet there is no clear plan of how those risks will be managed on the workshop floor.

“Diagnostic capability varies significantly across the MOT network. Reading a dashboard odometer is one thing; investigating a disputed, missing or potentially tampered mileage reading on an electric vehicle is quite another.

“We are, therefore, urging government to adopt a number of practices we proposed in our submission to the Consultation. There need to be clear diagnostic escalation routes, competence-based accreditation and standards aligned with IMI TechSafe. There also needs to be a clear commitment to support for garages on equipment and training. Without these, disputes will fall inconsistently on garages, motorists and the DVLA, and public confidence in the new tax will suffer.”