New car tax changes which came into effect earlier this week will "make cars more expensive to own", according to experts. Vehicle Excise Duty (VED) fees went up for almost all petrol, diesel and electric car owners from April 1, 2025. 

Many of the increases were in line with Retail Price Index (RPI) inflation although the introduction of electric car, hybrid and first-year VED prices are new for 2025. Andy Wood, International Tax Expert at Tax Natives has suggested the new fees will dramatically increase the cost of ownership. Electric cars are likely to feel the impact of the changes having previously been completely exempt from VED fees up until now. 

However, Andy stresses the news may actually be good for EVs which are now likely to be cheaper than petrol and diesel models. 

Andy said: “Although electric vehicle owners are still benefiting from the shift towards cleaner vehicles, the end of the VED exemption will make these cars more expensive to own. 

"However, the costs are still relatively lower compared to traditional petrol or diesel cars, making EVs a better option for many drivers in the long term."

Brand new electric car owners  pay just £10 in the first-year on the roads, considerably lower than combustion models. 

This is an additional £425 fee issued to vehicles with a list price over £40,000, payable over a five-year spell between year two and year six. 

Tax Natives warns this may bring total EV bills up to £620, which could be a major concern for cash-strapped road users.

Motoring experts at DriveElectric previously predicted the new tax rules would not have too much of an impact on electric vehicles. 

They commented: "While VED will be introduced for EVs, they still offer lower running costs, tax benefits, and environmental advantages compared to traditional petrol or diesel vehicles."