Pay-per-mile EV levy risks derailing UK net-zero transition

Welcome to Net Zero News, where we bring you the latest developments driving the UK’s transition to a net-zero future. Net Zero News can reveal that Andy Palmer, widely regarded as the “Godfather of EVs,” has warned that a proposed pay-per-mile levy on electric vehicles could jeopardise progress towards decarbonising road transport.

Speaking at the Automotive 2025 conference at Westminster on 26 November 2025, Palmer cautioned that introducing a per-mile charge on electric cars before the phase-out of new petrol and diesel models is complete would undermine the government’s own objectives. The former chief planning officer at Nissan made his remarks before an audience of industry leaders, policymakers and transport analysts.

As the UK accelerates towards its net-zero target, electric vehicles have enjoyed various incentives, including purchase grants, free workplace charging and an exemption from vehicle excise duty. Those measures helped lift EV market share to nearly 20 per cent of new car sales in 2024. However, the Plug-in Car Grant was withdrawn in June 2022 and the workplace charging scheme closed later that year, leaving only the VED exemption and modest electricity taxes in place.

Underlining the tax disparity between fossil-fuel and zero-emission vehicles, Palmer noted: “Drivers of petrol and diesel vehicles currently shoulder around 58p in fuel duty plus 20 per cent VAT, which adds up to about 15p per mile, while EV drivers typically pay the equivalent of around 4.5p per mile in electricity charges.” He argued that penalising EV drivers by levying additional road charges risks reversing the positive momentum built up over the past decade.

In a significant step towards the UK’s net-zero goals, policymakers must balance revenue requirements for maintaining road networks with maintaining incentives that drive the shift from internal combustion engines. Palmer suggested that any uniform per-mile road user charge should only be introduced after the ban on new petrol and diesel cars comes into force in 2030 for cars, and 2035 for all light vehicles, as outlined in the government’s 2020 transport decarbonisation plan.

Implementing a per-mile levy prematurely could provoke public backlash and push motorists to delay or avoid electrifying their vehicles, diminishing the expected emissions savings and slowing the growth of charging infrastructure. Palmer emphasised that a predictable, long-term policy framework is essential to encourage further investment from automakers and charging network operators.

Net Zero News understands that the Department for Transport and HM Treasury are examining various options for raising revenues currently generated by fuel duty and VED, which have declined as petrol and diesel consumption falls. Any shift towards distance-based charging will have to consider administrative complexity, privacy concerns and integration with existing payment systems.

This debate unfolds against a backdrop of the UK’s legally binding commitment to reach net zero carbon emissions by 2050 and the intermediate target to reduce greenhouse gas emissions by 68 per cent by 2030 compared with 1990 levels. The transport sector accounts for around a quarter of the UK’s emissions, making the electrification of road vehicles crucial to meeting these statutory goals.

Community groups and local authorities have welcomed Palmer’s intervention, noting that the transition to EVs has delivered cleaner air in urban areas and spurred job creation in manufacturing and energy services. Yet they caution that any new levy must be accompanied by assistance for low-income households to avoid disproportionate impacts on those less able to afford newer vehicles.

Net Zero News understands this forms part of a broader review of transport funding scheduled to report ahead of the Autumn Budget. The government is expected to consult on draft proposals in early 2026, with a view to legislating for any new charging mechanism by 2028 at the latest.

Looking ahead, policymakers will need to set clear milestones for when a uniform per-mile charge might be introduced, and how revenues will be reinvested in green transport infrastructure. Industry observers will be watching closely for signals in the forthcoming budget and the spring transport strategy update.

Net Zero News is powered by the Net Zero Club.
Join the UK’s fastest-growing net-zero community.
Upcoming Events:
Net Zero Scotland Projects Conference – Edinburgh
Net Zero Nations Projects Conference – Westminster, London
Got a net-zero project to share? Email: lee@net-zero.scot