Half Electric, Fully Taxed? Hybrid Drivers Face New Pay-Per-Mile Charges

Drivers of plug-in hybrid vehicles could soon find themselves paying for every mile—regardless of how often they actually use electric power—as the Government pushes ahead with a new pay-per-mile tax.

Under the plans, plug-in hybrid electric vehicles (PHEVs) will be included in the upcoming electric vehicle excise duty (eVED) scheme from 2028, with motorists charged 1.5p per mile—half the rate applied to fully electric vehicles.

Reality vs expectations

The move comes despite fresh evidence suggesting hybrids are used less in electric mode than previously thought. New analysis from the Department for Transport indicates that PHEV drivers complete a smaller share of journeys on battery power than earlier government estimates suggested.

Previously, the Treasury had assumed many hybrid drivers were using electric mode for around half their mileage—a figure now under scrutiny.

“Double taxation” concerns

Critics argue the policy effectively amounts to double taxation, as PHEV drivers already pay fuel duty when using petrol, yet will also face a per-mile charge.

Despite the backlash, ministers are pressing ahead, framing the scheme as a necessary step to plug a growing gap in public finances. As electric vehicles become more common, fuel duty revenues—currently worth around £24bn a year—are expected to decline sharply.

The Office for Budget Responsibility estimates the new system could generate around £7bn annually by 2050, still well below current fuel duty levels.

Simplicity over precision

The Government has ruled out tracking whether miles are driven on electric or petrol power, citing concerns over privacy and administrative complexity. Instead, it argues that a reduced flat rate for hybrids strikes a fair balance.

A shrinking window for hybrids

Plug-in hybrids currently make up around 12% of new car sales, but their long-term future is limited. Under the UK’s zero-emission vehicle mandate, the sale of new PHEVs will be banned from 2035.

For now, however, hybrid drivers face a future where every mile counts—whether it’s powered by battery, petrol, or a bit of both.