Octopus EV to absorb new electric car road tax for existing lease customers

Octopus Electric Vehicles will cover the UK government’s new pay-per-mile tax for all existing customers, meaning no extra charges for drivers who have already made the switch to electric.

Electric Vehicle Excise Duty, which was announced in the Autumn Budget 2025, will introduce a 3p per-mile charge for electric vehicles. It is supposed to come into effect in April 2028 and is designed to replace fuel-duty revenue as more drivers move away from petrol and diesel.

Customers currently on an Octopus EV lease, who completed an order by 28 November, will be fully protected from the new charge until the end of their lease. Octopus EV says nearly 20,000 drivers are set to benefit, ensuring no surprise costs undermine their move to cleaner transport. 

“EV drivers should contribute to road upkeep, but fairly and at the right time. Until the details are finalised, we want our existing customers to know they won’t be affected. They made the switch early, and we’re rewarding that commitment by absorbing the new tax and keeping their costs steady,” said Gurjeet Grewal, chief executive of Octopus Electric Vehicles.

The EV-only leasing company is monitoring the government’s consultation process on how the tax will work in practice.

Octopus Electric Vehicles has also committed to ensuring that any new administration caused by the tax changes will be kept to a minimum, using its technology and operational systems to deliver the same seamless, hassle-free experience customers expect.

“Our customers shouldn’t have to wade through new forms or fiddle with extra mileage reports,” said Grewal. “If there’s admin to be done, we’ll make it as easy as possible. We’ll be contributing to the government’s consultations on their new tax rules to help ensure they’re fair and easy for drivers to navigate.”

Commenting on the support announced for electric cars in the Budget, Grewal added: “The government has sent a clear signal that EVs remain a UK priority. Extending the Electric Car Grant and investing further in public charging will give drivers the confidence to make the switch. As momentum stalls elsewhere in Europe, the UK now has a real opportunity to lead the way on cheaper, cleaner driving.”

Octopus Electric Vehicles offeres leasing, game-changing EV tariffs and access to its public charging roaming service, Octopus Electroverse.