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

Octopus Electric Vehicles has announced it will cover the cost of the new pay-per-mile road tax for all existing lease customers, shielding them from additional charges once the tax comes into force.

The tax, announced in the Autumn Budget 2025, will introduce a charge of 3 pence per mile for electric vehicles from April 2028, as part of efforts to replace declining fuel-duty revenues. Octopus EV said it will absorb the cost of the tax for customers who completed a lease order by 28 November, covering the charge for the remainder of their lease terms.

The move is expected to benefit nearly 20,000 drivers currently leasing electric vehicles through the company.

Gurjeet Grewal, chief executive officer of Octopus Electric Vehicles, said the decision was intended to protect early adopters of electric vehicles from unexpected costs while details of the new tax are still being finalised.

“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.”

Octopus EV also said it is monitoring the government’s consultation on how the tax will be implemented and has committed to minimising any additional administrative burden for drivers. The company said it will use its technology and operational systems to handle mileage reporting and related processes where required.

The company added that it plans to contribute to consultations on the new tax to help ensure the system is straightforward for drivers to use.