Electric cars in the UK: the market and what buyers should know

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Battery electric cars accounted for 26.2 per cent of new car registrations in the UK in the first nine months of 2026, a record pace but still short of the 33 per cent the Zero Emission Vehicle (ZEV) mandate expects of manufacturers this year. For buyers, the picture is shaped by a government purchase grant, changing vehicle tax rules, a planned pay-per-mile charge from 2028 and, in London, the end of the free ride through the Congestion Charge zone.

This guide sets out where the market stands in October 2026 and the costs and incentives UK drivers, and Londoners especially, should weigh before choosing an electric vehicle (EV).

The market: record months, but behind the mandate

According to preliminary Society of Motor Manufacturers and Traders (SMMT) figures reported by electrive, 99,199 battery electric cars were registered in September 2026, a 28.3 per cent share of a 350,518-unit market and the strongest month on record for EVs. Year-to-date EV registrations reached 454,945, up 30.2 per cent on 2025.

Those numbers sit against the ZEV mandate, which requires a rising share of each manufacturer’s new car sales to be zero emission. Following changes announced in April 2025, the trajectory runs from 28 per cent in 2025 to 33 per cent in 2026, 38 per cent in 2027 and 52 per cent in 2028. The same revision kept the 2030 end date for new petrol and diesel cars, allowed hybrids to remain on sale until 2035 and cut the penalty per non-compliant car from £15,000 to £12,000. The SMMT has warned that “targets continue to outpace demand”, and manufacturer discounting has been a significant feature of the market.

The Electric Car Grant

The Electric Car Grant (ECG) launched in July 2025, offering a discount at the point of sale on eligible new EVs. Official gov.uk guidance sets two bands: £3,750 for cars with the best environmental scores in manufacturing and £1,500 for the second band. Cars must have a recommended retail price of £37,000 or less, with some flexibility for higher-specification versions of an eligible model up to £42,000.

At the Autumn Budget 2025 the Chancellor announced a further £1.3 billion, extending the scheme to 2030. The government states that grant levels and eligibility criteria can change without notice, so buyers should check the official list of eligible models and confirm the discount is applied by the dealer before ordering.

Vehicle tax: the end of the zero-rate era

Since 1 April 2025, electric cars have paid Vehicle Excise Duty (VED). Under DVLA guidance, an EV registered from that date pays £10 in its first year and then the standard rate, currently £200 a year.

The expensive car supplement

Cars above a list-price threshold pay an extra £440 a year for five years, starting from the second time the vehicle is taxed. For zero-emission cars, the threshold rose from £40,000 to £50,000 from 1 April 2026, and the change applies to most EVs first registered from April 2025. Petrol and diesel cars remain subject to the £40,000 threshold.

Pay-per-mile from 2028

The government has confirmed plans for an Electric Vehicle Excise Duty (eVED), set out in its consultation response. From April 2028, battery electric cars would pay 3p per mile and plug-in hybrids 1.5p per mile, on top of standard VED, with rates rising in line with CPI inflation from 2029-30. Drivers would estimate their annual mileage at each tax renewal, with readings checked against MOT records. The legislation had not been enacted at the time of writing and details may change.

For someone driving 8,000 miles a year, 3p per mile would equate to £240 annually at the initial rate.

Driving an EV in London

London’s rules have shifted. Transport for London (TfL) confirmed that the Cleaner Vehicle Discount, which exempted EVs from the Congestion Charge, ended on 25 December 2025. From 2 January 2026 the daily charge rose to £18, and electric cars registered for Auto Pay receive a 25 per cent discount, falling to 12.5 per cent from 4 March 2030.

Fully electric cars produce no exhaust emissions and therefore meet the Ultra Low Emission Zone (ULEZ) standards, avoiding its £12.50 daily charge. Charging is another consideration: Department for Transport statistics for 1 July 2026 count 121,171 public chargers across the UK, with London recording the highest density at 345.1 per 100,000 people. London ranks second-lowest for rapid chargers per head, however, reflecting its reliance on slower on-street points.

Key takeaways for buyers

Check the official ECG eligibility list; the grant only applies to approved models at or below the £37,000 price cap.
Budget for £200 a year in standard VED, plus £440 a year for five years if the list price exceeds £50,000.
Factor in the proposed 3p per mile eVED from April 2028 if you plan to keep the car long term.
In central London, register for Congestion Charge Auto Pay to receive the 25 per cent EV discount.
Assess home, workplace and nearby public charging before buying, especially without a driveway.

Tax and grant rules change regularly; for business or salary sacrifice purchases, take professional advice.

Frequently asked questions

Do electric cars still get free entry to the London Congestion Charge?

No. The exemption ended on 25 December 2025. Since 2 January 2026, electric cars registered for Auto Pay receive a 25 per cent discount on the £18 daily charge.

How much is the Electric Car Grant?

Either £3,750 or £1,500, depending on the model’s environmental band. It applies only to eligible new cars priced at £37,000 or less, and is deducted by the dealer at the point of sale.

When will pay-per-mile tax on electric cars start?

The government plans to introduce eVED from April 2028, at 3p per mile for battery electric cars and 1.5p for plug-in hybrids, subject to legislation.

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