Car tax changes are coming with Rachel Reeves’ Vehicle Excise Duty (VED) price hikes just around the corner this April. Electric car owners are in for the biggest change in 2026, with the Chancellor set to update the Expensive Car Supplement (ECS) fee threshold limits.
Last year, electric cars were hit with car tax fees for the first time, including the controversial £40,000 ECS fee. This is an additional £425 charge for cars with a list price of over £40,000, traditionally reserved for high-performance and high-pollution petrol and diesel models.
After concerns around the number of electric models priced above the cut-off, thresholds will rise this Spring. From April, the limit will increase from £40,000 to £50,000, even if ECS fees rise from £425 to £440.
However, electric car buyers still aren’t safe, with optional extras still counting towards the list price and, by extension, the £50,000 target. The base price of a Tesla Model Y is under £45,000 and would no longer pay the ECS fee under the 2026 changes, but opt for the premium interior, large wheels and performance upgrades and buyers could well be above £50.000.
The Peugeot E-3008 starts at approximately £45,000. However, opting for the optional extras or the quicker GT model could push costs beyond £52,000. Likewise, base versions of the Volkswagen ID.3 can be around £45,000, but can exceed £50k once the spirit trims and performance boosters are added.
The difference between exceeding £50,000 is stark, with ECS fees charged over five years, between the second and sixth years of ownership.
That’s five lots of £440, or £2,200 in extra tax for the sake of boosting some additional comfort add-ons. It means that from April, installing a sportier alloy could be enough to tip drivers over the cut-off and warrant hefty tax fees.
426,000 cars are paying ECS charges in the UK, but with manufacturers now forced to build more electric cars to meet Zero Emission Vehicle (ZEV) Mandate targets, this figure could rise in the coming years.