A new per-mile tax on electric vehicles could deter nearly half of potential buyers from switching to EVs, 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 have to pay a new charge of 3p per mile traveled, a move announced by Chancellor Rachel Reeves. Nathan Coe, chief executive of Autotrader, said the decision risked undermining years of efforts to encourage drivers to move away from petrol and diesel.
Coe described the policy as “inconsistent and inconsistent” with the government's stated ambition to accelerate the transition to electric vehicles, warning that it could slow down the pace at a critical stage.
AutoTrader's latest report, No Driver Left Behind, found that while 62 percent of motorists are currently considering an electric car as their next vehicle, that figure drops sharply once costs and earnings are taken into account. Among households earning less than £40,000 a year, only 48 per cent are considering an EV, while 73 per cent of those on higher incomes are considering an EV.
Despite falling battery costs, electric vehicles remain on average about 17 percent more expensive than their petrol counterparts. Research shows that purchase price, rather than simply charging access fees, remains the biggest barrier to adoption.
Age and location also play an important role. While 72 percent of drivers ages 17 to 34 say they are ready to go electric, only 35 percent of drivers over 55 believe the same. Urban residents appear to be more receptive than rural areas, with 72 percent of urban drivers considering an EV, while this is at a much lower level in more remote locations.
This 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.
The gender gap was also clear, with women being almost ten percent less likely than men to consider an EV. Concerns over charging availability and battery range, especially for family use, were cited as major factors.
The report also found that ethnic minority motorists are more likely to consider electric vehicles, although Autotrader said this may partly reflect the higher proportion of these drivers living in cities, where charging infrastructure is more developed.
Ian Plummer, chief customer officer at AutoTrader, said cost remains the deciding issue. “We are at a defining moment in the UK’s electric vehicle transition, but the funding divide still remains,” he said. “If low-income families can't access affordable electric cars, we risk creating a two-tier system, where cleaner, affordable motoring will be available only to those who can already afford it.”
Plummer said the solution lies in expanding the supply of low-cost electric models, improving transparency around battery health and addressing charging challenges for drivers without a driveway.
The findings come despite strong headline growth in EV sales. Nearly one in three new cars sold in Britain last month was fully electric, according to the Society of Motor Manufacturers and Traders. However, 2025 was the first year in which overall EV sales consistently failed to meet the government's annual targets, with all-electric vehicles accounting for 23.4 percent of new registrations.
Manufacturers that fall short of mandated EV sales limits face financial penalties or have to buy credits from rivals that exceed them, adding further pressure to a market already grappling with policy uncertainty.
Amy Ingham
Amy is a newly qualified journalist specializing in business journalism with responsibility for news content at Business Matters, the UK's largest print and online source of current business news.