Budget 2025: how the EV tax affects apartment residents
The government's recent budget introduced a new road tax for electric vehicles. From 2028, EV drivers will pay 3p per mile through the electric Vehicle Excise Duty (eVED). Plug-in hybrid drivers will pay 1.5p per mile. Petrol and diesel drivers won't pay eVED, but they'll continue paying fuel duty, estimated at around 6p per mile (effectively frozen since 2011).
For most drivers EV ownership therefore continues to be cheaper than running a petrol car. EV drivers will pay less in eVED than they would in fuel duty on equivalent petrol vehicles. But the timing is questionable. At the time when the government needs EV adoption to accelerate, they've made going electric significantly more expensive.
The impact on apartment residents
For most EV drivers who charge at home overnight on cheap tariffs (7-10p per kWh, or 2-3p per mile), this tax represents a 100% increase in running costs. That's not a gradual introduction. That's a shock.
Apartment residents without home charging face an even bigger hit. They're already paying more to run an EV through public charging, both due to higher electricity costs and VAT rates. While home charging attracts 5% VAT, charging in shared parking areas is often classified as commercial and charged at 20% VAT.
The barriers add up
Around 1 million UK households live in apartments with covered car parks. Thanks to a fire risk exemption in Part S Building Regulations, many of these buildings struggle to get charging infrastructure installed at all. Despite evidence showing EV fires are 20-35 times rarer than petrol car fires, insurance companies and fire risk assessors have taken increasingly cautious positions often blocking installations entirely.
The result?
These residents can't charge at home. They're forced to rely on public charging, which costs 40-80p per kWh. That's 5-10 times more expensive than home charging. Increasingly frustrated drivers inevitably turn to unregulated methods to charge at home in their apartment. Whilst still relatively rare there is a growing trend of drivers using 3 pin sockets and long extension cables in order to charge their car. This is unsafe and when fed from the landlord supply is unfair as costs are reconciled accurately and their neighbours end up paying to fuel their vehicle!
Why this matters
The government’s Zero Emission Vehicle Mandate requires all new cars sold to be electric or plug-in hybrid by 2030. Meeting these targets depends on making EV ownership accessible to everyone, including the millions who live in apartments.
According to the Office for Budget Responsibility, this introduction to eVED tax alone is expected to reduce EV sales by 440,000 vehicles. That's roughly one year's worth of current total EV sales wiped out.
The government still has time to fix this. They could introduce road pricing fairly at a low rate (perhaps 0.25p per mile) for all vehicles, not just EVs. Or scale it gradually as EV adoption grows, rather than hitting early adopters with a 100% cost increase. They could also update the Part S exemption or provide clearer fire risk guidelines to accelerate the introduction of infrastructure that would make driving an EV more affordable and create space for new taxes should they be needed.
We design infrastructure that considers future demand, manage the complexity post-installation, and take on maintenance and billing so property managers don't have to. This includes providing residents with cheaper home charging rates through our network. We believe everyone deserves fair access to EV charging, regardless of whether they have a driveway.
The government needs to level the playing field for apartment dwellers. Until then, we'll keep working to make residential EV charging accessible, affordable, and fair for everyone.
Ready to make EV charging work for your residents? We help install and manage EV infrastructure in apartment buildings. Get in touch for a free consultation and see how we can future-proof your property.
