Against a backdrop of weak economic growth, stretched public finances and falling fuel duty receipts, the Autumn Budget set out a revenue-raising package centred on reforms to motoring taxation.

For the UK’s leasing and mobility sector, the announcements represent a material shift in the long-term economics of electric vehicles (EVs) and the structure of company mobility schemes.

The introduction of Electric Vehicle Excise Duty (eVED) from April 2028, set at 3p per mile for battery-electric cars and 1.5p for plug-in hybrids, drew the strongest reaction across the leasing community. While long anticipated, businesses argue that the measure lands at a delicate moment for EV confidence.

Adam Hall, Director of Energy Services at Drax Electric Vehicles, said the timing “risks slowing progress at a critical stage,” with new running costs introduced “just as momentum builds.” Several industry voices echoed these concerns, noting that businesses and employees weighing EV options could face fresh uncertainty.

Matt Walters, Head of Consultancy and Customer Value at Ayvens, described the move as premature, arguing that equalised Vehicle Excise Duty in April had already levelled the playing field: “Hot on the heels of Vehicle Excise Duty being equalised across petrol, diesel, hybrid and electric cars in April, the Chancellor announced two more significant changes in the Autumn Budget.

“From April 2028, the Treasury will introduce a 3p per mile levy for electric cars (and 1.5p for plug-in hybrids) to help plug the expected gap in fuel duty… This feels like a premature move in a market where electric vehicles, despite ongoing price cuts, still often have a higher purchase price. The OBR estimates that the impact could be as much as 440,000 fewer EV registrations over the next five years.”

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Walters said the average Business Contract Hire vehicle covers 14,400 miles per year, meaning the levy alone could add £432 to annual running costs. Despite this, he noted that conventionally fuelled vehicles would still need to reach around 70mpg to match an EV on overall costs.

Leasing.com CEO Mike Fazal stressed that EVs maintain an operating-cost advantage even with the new charge, but recognised that the financial impact becomes more pronounced for fleets covering high annual mileages. “For organisations operating high-mileage electric fleets, the impact will understandably feel larger,” he said, though EVs remain competitive against equivalent petrol and diesel models on total running costs.

Christian Gorton, Marketing Director at CA Auto Finance, described eVED as “a real setback for current and prospective EV drivers,” warning that additional lifetime costs “could materially impact how quickly we’re able to meet the Government’s net-zero targets.”

Maria Bengtsson, EY UK&I Mobility Leader, agreed the measure introduces “a potential barrier to demand,” though she welcomed the Government’s £1.3 billion extension of the Electric Car Grant and further public charging investment.

Reforms to vehicle taxation also drew reaction. The rise in the Expensive Car Supplement (ECS) threshold to £50,000 was widely viewed as helpful, though several commentators said it fell short of market reality.

Walters highlighted the significance of the uplift, noting that the adjustment avoids an unnecessary £440 surcharge for many recent EV registrations: “Left unchanged, this would have added £440 on top of the first five annual VED renewals for the majority of vehicles registered since 1 April 2025… The OBR estimates this will offset 130,000 registrations otherwise lost to eVED.”

Caroline Sandall-Mansergh, Consultancy and Channel Development Manager at Alphabet (GB), said the uplift “doesn’t go far enough,” citing Alphabet data showing an average £56,633 P11D value across more than 1,000 EV models.

Robbie Watson, Senior Associate in the corporate tax team at Birketts LLP, said the Budget “introduces sweeping changes that will reshape fleet, leasing and employee car strategies,” including reduced allowances and future changes to Motability VAT treatment.

Rising fuel costs are also on the horizon. Fuel duty will be unfrozen for the first time since 2010, with stepped increases from September 2026. While many fleets have shifted away from petrol and diesel, the change still affects van operators and mixed-fuel portfolios.

Walters said the freeze ending had long been expected, but pointed out the significant contrast with EV charging costs over the past decade: “Although this will add costs for fleets, the price of fuel has barely changed since the freeze was introduced 15 years ago… The story is very different for electric vehicle drivers, who have faced significantly higher charging costs as the price of energy has increased. This will be critical for supporting the UK’s growing EV market.”

Paul Holland, Managing Director for UK/ANZ Fleet at Corpay, said the Budget “makes life harder for fleets and small businesses,” warning that “nothing announced today makes life easier for fleets or small businesses.”

There was also relief for fleets investing in zero-emission vehicles and infrastructure. Walters welcomed the extension of 100% first-year allowances for EVs and chargers to 2027, though he noted disappointment that the new 40% allowance for lessors did not go further: “Whilst it is not the 100% rate we had hoped for, it makes leasing even more attractive.”

He also criticised the cut in the main rate of capital allowances from 18% to 14% from 2026–27, calling it a “further disincentive” for plug-in hybrids at a time when they already face higher company car tax, CO₂ increases and the incoming mileage levy.

On support schemes, Walters welcomed the extension of the Electric Car Grant to March 2030, noting it had “stimulated much-needed price reductions” across the market. However, he highlighted the lack of clarity over the Plug-in Van Grant — a gap he said sends “mixed signals” at a time when electric vans remain far behind mandated uptake levels.

There was consensus that delaying reforms to Employee Car Ownership Schemes until 2031 avoided immediate disruption. James Tew, CEO at iVendi, described the postponement as “good news,” noting it would allow government and industry more time to develop long-term solutions.