A new per-mile tax on electric vehicles could deter nearly half of prospective buyers from switching to an EV, according to new research from AutoTrader, raising concerns that government policy on electric car adoption is becoming increasingly contradictory.
From 2028, drivers of electric vehicles will face a new charge of 3p per mile travelled, a move announced by Chancellor Rachel Reeves. AutoTrader’s chief executive, Nathan Coe, said the decision risked undermining years of efforts to encourage drivers to move away from petrol and diesel.
Coe described the policy as “incoherent and inconsistent” with the government’s stated ambition to accelerate the transition to electric vehicles, warning that it could slow momentum at a critical stage.
AutoTrader’s latest report, No Driver Left Behind, found that while 62 per cent of motorists are currently considering an electric car as their next vehicle, that figure falls sharply once cost and income are taken into account. Among households earning less than £40,000 a year, just 48 per cent are considering an EV, compared with 73 per cent of those with higher incomes.
Electric vehicles remain, on average, around 17 per cent more expensive than their petrol equivalents, despite falling battery costs. The research shows that purchase price, rather than charging access alone, remains the biggest barrier to adoption.
Age and location also play a significant role. While 72 per cent of drivers aged 17 to 34 say they are open to going electric, only 35 per cent of over-55s feel the same. City dwellers appear more receptive than those in rural areas, with 72 per cent of urban drivers considering an EV compared with much lower levels in more remote locations.
That finding challenges the assumption that off-street parking — more common in rural areas — automatically makes the switch easier. AutoTrader said concerns about range, charging reliability and running costs continue to influence decisions regardless of home-charging access.
Gender differences were also evident, with women around ten percentage points less likely than men to consider an EV. Concerns over charging availability and battery range, particularly for family use, were cited as key factors.
The report also found that ethnic minority motorists are more likely to consider electric vehicles, although AutoTrader noted this may partly reflect the higher proportion of these drivers living in cities, where charging infrastructure is more developed.
Ian Plummer, AutoTrader’s chief customer officer, said cost remained the defining issue. “We’re at a pivotal moment for the UK’s electric vehicle transition, but there is still a lingering wealth divide,” he said. “If lower-income households can’t access affordable electric cars, we risk creating a two-tier system where cleaner, cheaper motoring is only for those who can already afford it.”
Plummer added that the solution lies in expanding the supply of lower-priced electric models, improving transparency around battery health and addressing charging challenges for drivers without driveways.
The findings come despite strong headline growth in EV sales. According to Society of Motor Manufacturers and Traders, nearly one in three new cars sold in Britain last month was fully electric. However, 2025 was the first year in which overall EV sales failed to consistently meet the government’s annual targets, with all-electric vehicles accounting for 23.4 per cent of new registrations.
Manufacturers that fall short of mandated EV sales thresholds face financial penalties or must purchase credits from rivals that exceed them, adding further pressure to a market already grappling with policy uncertainty.
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New EV tax risks derailing electric car take-up, AutoTrader warns