EV Road Tax 2025: Essential guide for private hire drivers

From 1 April 2025, all electric and low-emission vehicle owners will need to pay road tax (also known as Vehicle Excise Duty – VED) for the first time. This change, introduced by the UK government, applies to all drivers – including private hire drivers with all-electric vehicles.

At Otto Car, we know this change may feel frustrating for electric car owners. The road tax exemption has been a great financial benefit to support the switch to electric and it’s disappointing to see it go.

While this decision is out of our control, our commitment to supporting private hire drivers remains stronger than ever. We’re here to make sure that electric vehicles (EVs) stay affordable and practical for your business.

Here’s everything you need to know about the upcoming road tax changes.

What’s changing for EV road tax in 2025?

As you know, fully electric vehicles don’t currently pay road tax. But from 1 April 2025, there will be an end to free road tax for electric car drivers. These changes will apply to all new and existing zero or low-emission vehicles.

Here’s what private hire drivers need to know:

• Standard EV road tax rate: If your EV was registered between 1 April 2017 and 31 March 2025, you’ll pay the standard rate of £195 per year, which is the lowest band of road tax.
• First-year VED: Any new electric cars registered from 1 April 2025 will pay the lowest first year rate of £10, before moving to the standard rate of £195 from the second tax payment.
• Expensive car supplement: EVs with a retail price of £40,000 or more will have an extra £410 annual charge for five years, bringing them in line with other non-electric vehicles in this price range.
• Plug-in hybrids: Hybrid vehicles will no longer get a road tax discount. Any hybrids registered after 1 April 2017 will pay the standard rate of £195 per year.

For full details, visit the official UK government website: Vehicle tax for electric, zero or low emission vehicles.

How Otto Car is supporting private hire drivers with road tax

We get it – this change means an extra expense. That’s why we’re making it as simple and stress-free as possible for our community of drivers.

When you join Otto Car on one of our all-inclusive plans – Rent to Buy, PCO Car Hire, or AfterCare Scheme, the standard road tax charge of £195 and the current £410 expensive car supplement are covered in your weekly payments for all new zero-emission cars* registered from 1 April 2025.

This means there won’t be any extra surprises – just one payment to keep things simple and give you peace of mind.

*(This also applies to Toyota hybrid vehicles registered after 1 April 2025.)

Save more with an electric car

We still believe EVs are the best choice for private hire drivers looking to save money.

Even though road tax is no longer free for EVs, it’s still much cheaper to run an electric car compared to petrol, diesel, or hybrid vehicles.

As well as being better for the environment, EVs are a smarter financial choice for private hire drivers. With fewer moving parts, lower maintenance costs, and cheaper running expenses, you can keep more of your earnings while enjoying a smoother, more affordable ride on UK roads.

Make the switch to electric to drive smarter, save more, and boost your profits.

Ready to drive into the future? Join Otto Car today

Even with the road tax charge, EVs are still the smartest choice. Enjoy the latest technology, top safety and cost-saving features, and a smooth ride. Your car is your livelihood – make sure it works as hard as you do.

Explore our wide range of electric cars on Rent to Buy or PCO Car Hire plans, designed to fit your needs.

Already know the car you want? Visit one of our London hubs or call us on 020 8740 7444 – our friendly Otto Team is always here to help!

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