The UK’s 2028 pay‑per‑mile charge for EVs is coming. Here’s what it means for costs, fairness, and how smart green technology can turn it into an advantage.
Most people assume switching to an electric vehicle means saying goodbye to fuel duty forever. The UK Treasury has very different plans.
By April 2028, the UK is expected to phase in a pay‑per‑mile charge for electric vehicles (EVs). On one level, it’s predictable: fuel duty revenues are collapsing as drivers move to cleaner cars. On another, it raises a tough question for anyone investing in green technology: will driving an EV still be affordable and attractive when every mile is metered?
This matters because transport isn’t a rounding error in climate policy. It’s the single largest emitting sector in the UK, responsible for around 26% of greenhouse gas emissions. If road pricing is handled badly, it could slow EV adoption, undermine net‑zero goals, and spook businesses that are planning electric fleets or smart mobility services.
Here’s the thing about the 2028 pay‑per‑mile charge: it isn’t just a tax story. It’s a data story, a fairness story, and a green technology story. Done right, it can push cleaner choices, fund better infrastructure, and reward efficient driving. Done badly, it becomes just another bill.
What the UK EV pay‑per‑mile charge is really about
The core idea is simple: as EVs replace petrol and diesel cars, fuel duty and Vehicle Excise Duty (VED) revenue falls, but roads still cost billions to build and maintain. The government wants to replace that lost money with a distance‑based road charge.
Instead of paying tax mostly at the pump, EV drivers would pay based on how many miles they drive, and potentially where and when they drive. Think of it as a mobile‑era version of road tax: dynamic, data‑driven, and tightly linked to actual road use.
Why road tax has to change
Right now, UK drivers contribute through:
- Fuel duty on petrol and diesel
- VAT on that fuel
- Vehicle Excise Duty (VED)
- Tolls and congestion/clean air charges in some areas
EVs skip fuel duty completely and usually enjoy discounted or zero‑rated VED. That’s been deliberate to kick‑start adoption. But as EV share rises (over 50% of new car sales in some months across Europe, and growing strongly in the UK), the Treasury faces a structural hole.
Fuel duty brings in tens of billions of pounds a year. Plug‑in vehicles are quietly eroding that base. A 2028 pay‑per‑mile EV tax is the government’s way of getting ahead of the curve rather than watching revenue collapse.
The reality? Road pricing is coming in some form. The debate now is about design, fairness, and data governance, not whether it will exist.
Will EVs still be cheaper to run under pay‑per‑mile?
Short answer: yes, but the gap shrinks if pricing is lazy.
Right now, the total cost of ownership for EVs often beats petrol cars over 3–5 years, once you factor in:
- Lower “fuel” cost per mile (home charging vs petrol)
- Lower maintenance (fewer moving parts, no oil changes)
- Tax benefits and congestion/ULEZ exemptions
A flat per‑mile EV charge risks eroding some of that advantage. Whether EVs keep their cost edge depends on three levers:
1. The price per mile
If the per‑mile rate is set crudely, EV owners could end up paying similar lifetime tax to petrol drivers, just through a different channel. That might feel politically tidy, but it’s bad climate policy.
A smarter approach is tiered pricing, for example:
- Lower per‑mile rates for zero‑emission vehicles
- Higher rates for heavier, more polluting vehicles (including some SUVs)
- Discounts for off‑peak or rural travel
This keeps a clear signal: driving an EV is still fiscally better than burning fuel.
2. Time and place
Road pricing is powerful when it reflects congestion and pollution. A mile driven through central London at 8:30am isn’t the same as a mile down a rural A‑road at 11pm.
Smart pricing can:
- Charge more for peak‑time urban congestion
- Charge less for off‑peak or low‑impact routes
- Incentivise shared mobility and public transport
That’s good for cities, but needs safeguards for people who can’t shift their commuting patterns or don’t have realistic public transport alternatives.
3. Electricity prices & charging patterns
EV owners who:
- Charge at home on off‑peak tariffs
- Use smart chargers that respond to grid conditions
- Pair EV charging with solar or home storage
will still enjoy a large running‑cost advantage. Businesses that manage fleet charging with AI‑based energy management will be even better positioned.
So yes, EVs remain financially attractive, especially if you charge smartly. The pay‑per‑mile charge just makes inefficient use of an EV more expensive.
Why this is a green technology issue, not just a tax tweak
The UK’s planned EV road pricing intersects directly with the broader green technology transition: smart grids, connected vehicles, AI‑driven transport planning, and data‑rich public services.
Data and AI: the hidden engine behind road pricing
A meaningful pay‑per‑mile system relies on data:
- Odometer readings or telematics for mileage
- Potential GPS data for location‑based pricing
- Time stamps to distinguish peak and off‑peak travel
That data doesn’t manage itself. It calls for:
- Robust privacy controls and clear consent models
- Secure data platforms that can handle billions of trip records
- AI and analytics to set prices that balance fairness, congestion, and emissions
This is where green technology gets interesting. The same analytics used to measure and price road use can also:
- Model air quality improvements from EV adoption
- Help cities plan charging hubs where they’re actually needed
- Support smart traffic lights and routing to cut idle time and emissions
Most companies miss this. They focus only on the immediate tax hit and ignore how their mobility data strategy could turn a compliance cost into operational savings.
Smart cities and integrated mobility
A nationwide EV pay‑per‑mile scheme, if designed with open standards, could plug into:
- Smart city platforms that coordinate traffic, public transport, and air quality
- Mobility‑as‑a‑Service (MaaS) apps that help people combine EV car share, rail, and micromobility
- Dynamic parking and curb management, steering drivers away from crowded centres
The UK has a chance to build one coherent system instead of a patchwork of tolls, congestion zones, and one‑off exemptions.
If you work in transport, energy, or fleet operations, the businesses that win won’t just “pay the new tax”. They’ll use AI‑driven planning, telematics, and smart charging to turn every mile and kilowatt‑hour into a data point they can optimise.
Fairness, privacy, and public trust: the hard questions
Road pricing only works if people trust it. And that’s where the politics gets messy.
Who pays more under pay‑per‑mile?
Some groups are more exposed:
- Rural drivers who travel longer distances and have fewer transport options
- Low‑income households pushed further from city centres by housing costs
- Small businesses and trades that rely on vans and pickups
If the UK gets this wrong, a green policy becomes a perceived punishment for exactly the people who already feel squeezed.
Policymakers have options though:
- Lower per‑mile charges for rural postcodes or designated low‑access areas
- Annual mileage allowances at a reduced rate for essential travel
- Targeted support for electric vans and commercial fleets
Done well, pay‑per‑mile could actually be fairer than fuel duty, because it can be tuned to circumstances instead of hitting everyone with the same rate at the pump.
How private is location‑based road pricing?
The other friction point is data. People don’t like the idea of government tracking every journey in real time.
A trustworthy system would:
- Use privacy‑preserving tech (for example, devices that calculate charges on‑board and share only billing data)
- Offer non‑location options (annual verified odometer readings for flat‑rate users)
- Be transparent about what’s collected, how long it’s kept, and who can access it
My take: the UK should treat road‑pricing data like health data—high‑value but heavily ring‑fenced. Anything weaker will erode public trust and slow adoption.
How businesses and drivers can prepare now
You don’t need to wait for 2028. There are practical moves you can make in 2025 that will still look smart when per‑mile charging kicks in.
For individual EV drivers
-
Choose EVs with strong efficiency
Models that use fewer kWh per mile will be cheaper to run and cheaper to tax under most road‑pricing formulas. -
Get serious about smart charging
- Install a smart home charger where possible.
- Use off‑peak tariffs to cut your per‑mile “fuel” cost.
- If you have or plan solar, look for chargers that integrate with your system.
-
Track your usage data
Apps and in‑car systems that log trips, energy use, and charging patterns will help you understand:- When and where you drive most
- How sensitive you’ll be to peak‑time or urban surcharges
-
Stay informed on policy trials
Pilot schemes, consultations, and early adopter programmes often come with discounts or incentives.
For fleets and green‑minded businesses
This is where the shift to pay‑per‑mile can actually create a competitive edge.
-
Adopt telematics now
Use vehicle data to:- Optimise route planning
- Reduce empty miles
- Identify drivers or routes that burn the most energy
-
Integrate EV fleet management with energy management
- Coordinate charging with on‑site solar or storage.
- Shift charging to off‑peak grid periods.
- Use AI‑based software to decide which vehicle charges when.
-
Model your exposure to road pricing
With a year’s worth of GPS and mileage data, you can:- Forecast likely per‑mile charges by route and time of day
- Test scenarios: “What if 20% of our deliveries move off‑peak?”
- Build a business case for further electrification or route redesign
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Engage with policy, don’t just read about it
Industry groups and local authorities are actively shaping how road pricing is rolled out. Being at that table matters more than complaining after rates are set.
The bigger picture: EV road pricing and the future of green transport
The UK’s pay‑per‑mile charge for EVs, set for April 2028, is more than a way to plug a hole in Treasury accounts. It’s a choice about what kind of transport system we want as we decarbonise.
Handled well, it can:
- Keep EVs financially attractive relative to fossil‑fuel cars
- Encourage efficient, off‑peak, and shared travel
- Feed high‑quality data into smart cities and green infrastructure planning
- Support sustained investment in roads, charging, and public transport
Handled badly, it becomes a blunt instrument that slows the shift to cleaner vehicles and deepens public distrust of climate policy.
From a green technology perspective, the opportunity is clear: use AI, telematics, and smart energy systems to make every mile counted by the taxman work harder for you. Businesses that treat 2028 as a design constraint—not a surprise—will save money and reduce emissions at the same time.
If you’re planning EV adoption, smart city projects, or low‑carbon logistics, now’s the moment to ask: When every mile has a price tag and every trip generates data, how can we turn that into an advantage rather than just another cost line?