Used EVs can save owners an average of £1,450 per year despite new tax – study

Used electric vehicles (EVs) can still save their owners an average of £1,450 per year compared with petrol cars despite the incoming mileage tax, according to new analysis.

The Energy and Climate Intelligence Unit (ECIU) think tank, which conducted the research, said second-hand EVs will deliver “very significant savings” despite the introduction of electric Vehicle Excise Duty (eVED) from 2028.

The study considered the nine most-viewed used EVs on online vehicle marketplace Autotrader, taking into account all expenses during a typical 10 years of ownership, such as the cost of purchasing and running the vehicles.

They mostly consisted of larger EVs with high annual savings, such as the Audi Q4 e-tron (£1,936), Jaguar i-Pace (£1,584) and Polestar 2 (£1,186).

The ECIU also looked at two smaller EVs – the Renault Zoe and Kia Niro – which were not among the most popular on Autotrader.

Their annual savings of £940 and £650 respectively were not included in the £1,450 figure.

Savings from used EVs largely come from the significantly lower cost of charging a car with electricity than filling one up with petrol.

The ECIU said EVs have reached “price parity” with their petrol equivalents on the second-hand market.

A record 4% of used car buyers chose an EV between July and September, Society of Motor Manufacturers and Traders figures show.

That was compared with 2.8% a year earlier.

In her Budget on Wednesday, Chancellor Rachel Reeves announced that from April 2028, drivers of battery electric cars will be charged 3p per mile for eVED.

This is in response to a sharp reduction in revenue from fuel duty as more drivers switch from petrol or diesel cars to EVs.

ECIU head of transport Colin Walker said: “An ever-increasing number of savvy families are turning their backs on paying a petrol premium to run their old cars, trading them in for second-hand EVs that can save hundreds, even thousands, of pounds a year.

“The mixed messages being sent to consumers by the Government’s introduction of a 3p per mile tax on EVs is understandably causing concern, risks undermining consumer confidence, and could significantly slow the sale of new and used EVs.

“But it will not change the fact that second-hand EVs will continue to deliver very significant savings to families across the country.”