“Get That Electric Feeling” Meets Pay-Per-Mile Tax: Why UK Drivers Aren’t Buying The Message

The Government has just launched a big pro-EV campaign, “Get That Electric Feeling”, telling drivers they can save thousands by going electric.

At the same time, it’s also pushing ahead with a new pay-per-mile road tax for EVs and plug-in hybrids from April 2028.

If that sounds like mixed messaging, you’re not alone. A lot of the motor trade is scratching their heads too.

This blog is Marsh Finance’s take, UK-focused, plain English, and written for people who sell cars, finance cars, or just want the real story.

What The Government’s New EV Campaign Actually Says

The Department for Transport says the campaign is designed to show drivers the “savings and benefits” of switching to electric.

The headline claims include:

• Over 50,000 UK drivers have saved up to £3,750 off a new EV (linked to the Electric Car Grant).
• Drivers can save around £1,400 a year on running costs, compared with petrol or diesel.
• The UK now has over 87,000 public chargers, with more planned.

It’s a big, mainstream push across TV, radio, and digital.

So the goal is clear: reassure hesitant drivers and keep EV demand moving.

What The Pay-Per-Mile EV Tax Will Do

Now for the part that’s causing the backlash.

At Budget 2025, Government announced electric Vehicle Excise Duty (eVED), a mileage-based charge that starts in April 2028.

The proposed rates:

• 3p per mile for battery electric cars (BEVs)
• 1.5p per mile for plug-in hybrids (PHEVs)

And this is important:

eVED sits on top of normal VED. The consultation document says VED will continue, alongside the new mileage charge.

So for customers, this becomes:
annual road tax + pay-per-mile charge

Even if the Government says the rate is “about half” the fuel duty per mile paid by petrol and diesel drivers, it still feels like a brand new bill landing on EV owners.

Why The Messaging Feels Off To Drivers

This is where our view is blunt.

The campaign is telling drivers:
“EVs save you money.”

The tax plan is telling drivers:
“EVs will be charged per mile, and that will rise with inflation.”

You can’t blame people for thinking: which is it?

Most drivers don’t read consultations. They read headlines, and they talk to friends. The headline they’ll remember is “pay-per-mile tax”.

Once that’s in a customer’s head, they start questioning everything:

• “Will EVs keep getting taxed more?”
• “Will my used EV lose value faster?”
• “Is this a trap where the cheap running costs disappear?”

That doubt is poison for adoption.

Will This New Tax Slow EV Adoption?

We think it will, yes.

Not because EVs are suddenly a bad product. But because uncertainty kills confidence, and EV purchases already require more trust than petrol or diesel.

Even the Office for Budget Responsibility has warned the mileage tax could reduce EV sales, with one estimate pointing to around 24,000 fewer EV sales per year, adding up to hundreds of thousands fewer by 2030.

That matters to:

• Dealers trying to hit EV mix targets
• Fleets planning transition
• Used market operators relying on healthy demand
• Finance providers pricing risk

What Dealers Will See On The Forecourt

More “Talk Me Out Of It” Conversations

Customers will walk in wanting an EV… but half-expecting you to confirm it’s a bad idea.

They’ll ask questions like:

• “What’s the real cost once the tax starts?”
• “What happens if the Government changes it again?”
• “Should I just buy a hybrid and wait?”

Stronger Demand For Hybrids As A “Safe Middle”

Plug-in hybrids may still look like a bridge for some buyers, but the 1.5p per mile charge risks turning that bridge into a wobble.

We’d expect to see more buyers leaning towards:

• full hybrids
• efficient petrol
• used cars with proven running costs

Not because they love emissions. Because they hate risk.

Residuals Will Become Even More Sensitive

Used EV values already react quickly to policy, incentives, and public sentiment.

If buyers believe “tax is coming”, you may see:

• more cautious bidding
• more price negotiation
• slower movement on certain EV stock bands

What Brokers Will Hear From Customers

Brokers will be the first to feel it in lead quality.

More people will apply for finance, then pause. Not because they can’t afford it, but because they’re unsure if the deal still makes sense.

Expect more questions about:

• monthly payment vs running cost
• early settlement
• refinancing options later
• whether to wait until the tax rules are clearer

Why The Government Is Doing Both Things At Once

This is the reality the Government is juggling:

• Fuel duty is a massive revenue stream. As EVs grow, that revenue drops.
• They want more EVs, but they also need a long-term way to fund roads.

The eVED consultation spells out the intent: a system that’s meant to be fair, privacy-respecting, and simple to comply with.

That’s the policy logic.

The problem is public trust. People don’t like “new” taxes, even when the maths is arguable.

Marsh Finance’s View

We’ll say it plainly.

Launching a big pro-EV campaign right after confirming pay-per-mile tax is a hard sell.

Drivers are smart. They can spot the contradiction. And once people think they’re being “marketed at”, they stop listening.

We’re not saying EVs don’t have real savings. For many drivers, they do, especially if they charge at home and do decent mileage.

But we are saying this:
The new tax will make a lot of drivers hesitate, and hesitation is enough to slow adoption.

What Dealers Can Do Now

Keep It Honest, Not Salesy

If a customer asks about pay-per-mile, don’t dodge it.

Say:

• “Yes, the Government has announced it for 2028.”
• “Here’s what we know today.”
• “Here’s what it could mean based on your mileage.”

Build A Simple “Cost Per Month” Explanation

Customers don’t want spreadsheets. They want a simple picture.

Help them compare:

• monthly finance payment
• estimated charging cost
• VED today and potential eVED later
• insurance band reality

Protect Trust With Clear Finance Options

People who are unsure want flexibility.

That means:

• terms that aren’t stretched to breaking point
• clear early settlement explanations
• no over-promising on future values

Navigate The Transition With A Partner Who Gets It

While the EV market faces mixed messages and shifting tax rules, the demand for hybrids and efficient petrol vehicles remains the bedrock of the UK forecourt. At Marsh Finance, we provide the stability you need to keep your stock moving.

We’ve sharpened our focus to support what’s working right now:

• Specialist Hybrid Funding: We fully support PHEVs and full hybrids.
• Reliable ICE Finance: Consistent lending for quality petrol and diesel stock.
• No EV Volatility: We do not fund BEVs, allowing us to focus our expertise and competitive rates on the vehicles your customers are actually asking for.

Ready to partner with a lender that prioritises market reality?