Government Raises ECS Threshold for EV Vehicles
In a move to encourage more drivers to make the leap to a new full electric car, the UK government has announced an increase in the threshold for the Vehicle Excise Duty (VED) Expensive Car Supplement (ECS) from £40,000 to £50,000.
This change which will come into effect from 1st April 2026 and was first revealed in the 2025 Autumn Budget, the government aims to make more expensive EVs a more attractive proposition and is hoping more drivers will make the switch.
Essentially, if you're eyeing an EV costing between £40,001 and £50,000, you could save hundreds of pounds annually.
What is Vehicle Excise Duty and the Expensive Car Supplement?
VED, better known in layman’s terms as road tax, is based on factors like the car's age, emissions, and original list price.
The ECS (Expensive Car Supplement) is an extra charge added to the standard VED for higher value cars. Currently, it applies to any new car with a list price over £40,000, adding an extra £425 per year (rising to £440 from April 2026). This means owners of applicable vehicles pay around £620 annually during that period (£195 standard rate plus the ECS charge).
Are Full Electric Cars No Longer Exempt from VED Charges?
Until recently, zero-emission vehicles were exempt from both standard VED and the ECS. However, from 1 April 2025, for new EVs you will now pay a first-year VED rate of £10, then the standard rate of £195 for subsequent years, plus the ECS (if the vehicle is over £40,000).
Who Will Benefit from The Changes?
If your vehicle is full electric and valued from £40,000-£50,000, you will no longer have to pay the ECS charge, this is from 1st April 2026, but crucially it is retrospective meaning that most EV vehicles registered from 1 April 2025 will not have to pay the charge.
Example EV Car Saving:
- If you buy a new EV for £45,000 in May 2025, you'll pay £10 in the first year, then the standard £195 VED in subsequent years, there will be NO extra £425 supplement to pay.
- In contrast, a petrol or diesel car at the same price would still face the full ECS, pushing its annual tax to £620 for five years as The ECS for Petrol, diesel, and hybrid cars stays at the lower threshold of £40,000.
The government is hoping these changes will incentivise more drivers to make the switch to a full electric vehicle.