EV owners get some welcome UK Budget news — but big questions remain

The UK's recent Budget provided some welcome news for owners of internal combustion engine cars, but left big questions for electric vehicle (EV) owners. Chancellor John Healey, under the new Prime Minister Andy Burnham, announced a frozen fuel duty increase, which is a relief for conventional car owners. However, EV owners received even more positive news.

The temporary VAT relief on domestic electricity usage has been extended until July 2027, making home charging the most affordable option for EV owners. Additionally, the government allocated £100 million over two years to install more public charging points near homes, targeting residential streets where drivers can leave their vehicles to charge overnight.

To further ease the burden of installation, pavement gutters, which allow cables to be safely installed from the house to an EV parked on the road, will no longer require planning permission. This is particularly beneficial for those living in busy residential areas or terraced streets with limited driveway space. The measure also enables drivers to take advantage of cheaper off-peak energy tariffs.

Despite these positive developments, the future of the £3,750 Electric Car Grant, which was introduced by previous Chancellor Rachel Reeve, remains unclear. The grant reduces the cost of new EVs by up to £3,750, but without confirmation of its future, EV owners are left uncertain about potential savings. Meanwhile, the government is planning to introduce a new tax, dubbed the Electric Vehicle Excise Duty (eVED), which is set to be implemented in 2028.

Critics argue that this proposed charge, aimed at making up for losses in fuel duty and leveling the playing field between internal combustion engine and electric vehicles, should be delayed or scrapped. The government has acknowledged the need for clear communication and long-term certainty to maintain consumer confidence in the transition to electric vehicles.