Major car brands fire back at Rachel Reeves' pay-per-mile announcement with new 'tax rebate'

WATCH: Chancellor confirms electric vehicles will pay 3p per mile in new road tax

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GB NEWS

Felix Reeves

By Felix Reeves


Published: 26/11/2025

- 17:40

Omoda and Jaecoo said the new offer 'effectively covers the first few years of this new tax'

Two of the most popular car brands in the UK have announced new tax rebates to fight back against the Chancellor's newly announced pay-per-mile car tax changes.

Chancellor Rachel Reeves announced new measures for electric vehicle and plug-in hybrid vehicle owners, which will see drivers charged 3p and 1.5p per mile respectively.


The car tax changes have been widely criticised across the industry, with many warning that the decision will result in electric vehicles seeing a drop in interest from motorists looking to avoid extra costs.

In a bold move against the Chancellor, Chinese brands Omoda and Jaecoo have introduced a unique EV Tax Rebate on the new Omoda E5 and Jaecoo E5.

The offer will allow drivers to benefit from the equivalent of 20,000 miles at three pence per mile in a bid to entice motorists to cleaner vehicles.

The manufacturer-branded savings on the qualifying vehicles will be active across its national retailer network using approved finance products.

While the Government's pay-per-mile car tax will not be introduced until 2028, Omoda and Jaecoo are looking to help drivers make the transition away from petrol and diesel vehicles.

Given that the average electric car travels 8,740 miles every year, Omoda and Jaecoo UK are looking to cover between two and three years' worth of the new pay-per-mile EV tax.

The Jaecoo E5 and Omoda E5

Omoda and Jaecoo have unveiled the new offer in response to the Chancellor's pay-per-mile car tax announcement

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OMODA/JAECOO

Gary Lan, CEO of Omoda and Jaecoo UK, said the brands wanted to "make the transition to electric driving as smooth as possible for customers".

He added that this should be done "immediately" rather than in three or four years, once the Electric Vehicle Excise Duty changes are finally introduced.

Mr Lane continued, saying: "Our EV Tax Rebate for the Omoda E5 and Jaecoo E5 effectively covers the first few years of this new tax, giving drivers the equivalent of thousands of miles of zero-cost motoring.

"These vehicles represent the forefront of electric mobility, and this initiative reflects our commitment to making clean, efficient, and intelligent transportation more accessible to UK drivers from day one."

Drivers can opt for the Omoda E5, which will cost £34,565, once the brand's own EV Grant and EV Tax Rebate are introduced.

The E5 is packed with the latest in-car technology, an impressive 267-mile battery range, a 61 kWh battery and even a heat pump to boost the vehicle's efficiency.

Alternatively, the Jaecoo E5 is a luxury SUV, delivering 288 Nm of torque, up to 248 miles of battery range and acceleration from 0-62mph in just 7.7 seconds.

Drivers will pay just £33,329 for the E5, or £379 per month at 3.9 per cent APR finance.

The Jaecoo E5 and Omoda E5

Omoda and Jaecoo said the new offer 'effectively covers the first few years of this new tax'

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OMODA/JAECOO

Both brands have created a huge stir in the UK vehicle market with impressive sales totals, thanks to affordable prices and impressive ranges.

So far this year, Jaecoo has sold more than 21,000 vehicles, with a market share of 1.22 per cent. This is made even more impressive considering the manufacturer has been on the UK market for less than a year.

Omoda has seen a massive 717 per cent sales increase compared to this time last year, with 16,325 vehicles sold, as of the end of October.