This sounds expensive, but in reality running an EV at 3p per mile will be roughly half of the cost of the equivalent petrol or diesel-powered option.
There will be a couple of ways to pay the charge: either up front or monthly through direct debit.
How will eVED be enforced?
The system is not yet set in stone, but the Treasury has already ruled out fitting a ‘Black Box’ telematics tracker to each EV due to concerns over driver privacy.
Therefore, indications are that EV and PHEV drivers will be required to submit an estimated mileage for the year ahead when the time comes to renew their annual VED, and pay an upfront charge. Then, when the times comes to renew the car’s VED, the mileage would be checked (perhaps through a Government-funded mileage check) and a reconciliation applied, whether that be an extra charge for a greater number of miles covered or a refund if fewer miles have been travelled. If you pay through direct debit, your monthly payments will be altered accordingly.
In EVs more than three years old, the mileage would be checked via the annual MoT test.
Why this matters for your 2026 leasing decisions
If you’re in the market for a lease vehicle, the typical lease agreement lasts three or four years, in which case an EV or PHEV you invest in today will end up subject to the then-new eVED charge.
If you’re a company car driver, your annual mileage will affect how much extra will need to be paid in eVED, although you’ll need to work out with your fleet manager if your company will pay the lot, as it will with the basic VED charge, or if you’ll need to separate out your personal mileage and pay that yourself. Either way, the cost will need to be factored into the car’s Total Cost of Ownership figure before you even take up a lease on it.
