Rachel Reeves could 'torpedo' electric car sales after launching pay-per-mile taxes for millions

Felix Reeves

By Felix Reeves


Published: 04/12/2025

- 08:50

The UK is expected to meet compliance targets included in the Zero Emission Vehicle mandate

More than one in four drivers have invested in new electric vehicles over the last month as experts remain hopeful that sales will beat Government targets.

New data has shown that battery electric vehicles have captured 26.4 per cent of the new car market in November, marking the second strongest month for the car type.


In total, 38,742 electric cars were registered in November, with zero emission vans seeing a huge 24.5 per cent spike in registrations, with almost 3,000 new vans on the road.

The sales totals also place the UK in a good position to meet the terms of the Zero Emission Vehicle (ZEV) mandate by the end of the year, according to New AutoMotive's Electric Car Count.

While manufacturers must have 28 per cent of sales come from zero emission vehicles by the end of the year, companies can trade credits if they are at risk of missing the compliance levels, bringing the target down to around 20.5 per cent.

Retrospective changes to laws introduced in October 2025 have lowered the targets from 21.7 per cent to 20.5 per cent, with brands like Toyota, BYD and Chery benefitting from the new rules.

More than 430,000 electric cars have been registered so far this year, surpassing sales totals of plug-in hybrids and diesel vehicles.

Ben Nelmes, CEO at New AutoMotive, said the latest data was "great news for everyone who will benefit from cleaner air", in addition to proving that the ZEV mandate was working.

Chancellor Rachel Reeves and an electric car charger

Rachel Reeves has been warned that electric vehicle sales could slump after the Chancellor introduced pay-per-mile car taxes

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GETTY

He added: "Manufacturer credits effectively doubled last month alone. Manufacturers are comfortably on course to comply with the targets in 2025.

"As petrol and diesel sales slide, the electric market has matured to nearly 23 per cent of all 2025 sales. The transition is not just happening - it's accelerating."

German brands Volkswagen, BMW and Mercedes-Benz have seen success in recent months with electric car sales, with VW and BMW placing in second and third place for EV market share in the year-to-date.

This is despite the German Government lobbying for the European Union to change its rules on the 2035 deadline to ban the sale of new vehicles with internal combustion engines.

Chancellor Friedrich Merz suggested that cleaner "e-fuels" could be used to protect the industry from switching to electric cars when demand is not strong enough, as well as competition from China.

Tesla retains its crown at the top of the EV sales chart, but has seen its overall market share fall 2.9 per cent to 9.65 per cent compared to last November.

Tanya Sinclair, CEO of Electric Vehicles UK, acknowledged the positive EV sales, especially van registrations, but said the Government could "torpedo" uptake of EVs after the Budget.

"It's great to see more drivers choosing electric every month, and we will be watching how the Chancellor's measures will affect these trends."

Vauxhall electric van

Electric van sales have soared over the last month

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PA

Chancellor Rachel Reeves announced the introduction of pay-per-mile car tax changes for millions of drivers from 2028, and launched a consultation to hear feedback on the plans.

Electric car drivers will be required to pay 3p per mile, while plug-in hybrid vehicles are expected to pay 1.5p for every mile they travel.

Commenting on the rules, Toby Poston, chief executive of the British Vehicle Rental and Leasing Association (BVRLA), said: "Last week's confirmation of a pay-per-mile regime for electric cars is the wrong policy at the wrong time.

"It risks completely undermining the confidence that has been built, particularly for operators making long-term investment decisions."