Despite the tax increases, a Treasury spokesperson emphasized that transitioning to electric vehicles is vital for economic growth and climate change mitigation, highlighting the need for fiscal stability.

Starting April 1, 2025, electric vehicle (EV) drivers will no longer enjoy car tax exemptions, with a first-year rate set at £10 and a standard annual rate of £195 thereafter.

This tax change, which marks the end of an eight-year exemption for EVs, was previously announced by former Chancellor Jeremy Hunt and confirmed by current Chancellor Rachel Reeves in the Autumn Budget.

The changes were introduced with the intent to boost EV demand, but analysts express concerns that the increased costs may discourage potential buyers.

For electric vehicles priced over £40,000, owners will face an additional Expensive Car Supplement, which can add up to £620 annually for the first five years of ownership.

The tax increases are particularly steep for petrol and diesel vehicles, with some first-year taxes doubling compared to last year, exemplified by the Land Rover Defender's jump from £2,340 to £4,680.

Industry experts warn that these tax changes could deter consumers from choosing electric cars, undermining previous incentives aimed at promoting their adoption.

To manage rising costs, EV owners are encouraged to charge their vehicles at home and take advantage of off-peak electricity tariffs.

In response to the new tax structure, Vauxhall has adjusted its pricing strategy to keep its higher-end models below the £40,000 threshold to avoid the expensive car supplement.

A survey revealed that nearly one-third of UK residents would reconsider purchasing an EV due to rising energy costs, a sentiment likely to grow with the new tax increases.

These tax adjustments are expected to impact around 760,000 employees who drive company cars, generating significant revenue for the government.

Critics, including motoring journalists, argue that the new tax regime acts as a disincentive for EV ownership at a crucial time when the UK aims for 28% of new car sales to be electric this year.