EV Per Kilometre Tax in Portugal: What the UK 2028 Charge Really Means
Published: 22/08/2026
The UK has set a date: 1 April 2028
Three pence per mile. That is what a British EV driver will hand the state for every mile driven from 1 April 2028, on top of the annual road tax they already pay. It is called Electric Vehicle Excise Duty — eVED — and it is no longer a trial balloon: the UK government published its response to the public consultation on 13 July 2026, after more than 5,000 submissions, and the measure is heading into law.
Converted into the units we use here, that is roughly 2.2 cents per kilometre. Over a 15,000 km year, about €330. Not ruinous, but not nothing either. Which raises the question that matters if you drive — or are shopping for — an electric car in Portugal: does this land here?
How the UK per-mile EV tax actually works
The rates are not the interesting part of eVED. The mechanism is.
No GPS. No black box fitted to the car, no location data collected. The driver submits an odometer reading and an estimate of next year's mileage when renewing road tax. The DVLA — Britain's vehicle licensing agency — calculates what is owed, and the driver pays it upfront or in instalments across the year. At year end there is a reconciliation against actual mileage, with MOT records (the UK's annual roadworthiness test) used as a cross-check. Drivers who prefer it can let a connected car report its mileage automatically.
The confirmed rates:
| Vehicle type | Rate |
|---|---|
| Battery electric and hydrogen fuel-cell cars | 3 pence per mile |
| Plug-in hybrids | 1.5 pence per mile |
| Electric vans | Exempt |
Rates will be uprated with inflation from 2029-30. In practice, around 5.6 million vehicles enter the system in 2028-29 alone.
One detail explains the whole design: UK fuel duty is 52.95p per litre, which for a typical petrol car works out at roughly 6p per mile in tax alone. eVED's 3p is deliberately half that. The government is charging EVs while keeping the tax advantage tilted in their favour.
What a per-kilometre charge costs a high-mileage driver
The British numbers, in miles, against what a petrol car pays in fuel duty over the same distance:
| Annual mileage | eVED at 3p/mile | Fuel duty on a petrol car | Difference |
|---|---|---|---|
| 8,000 miles (~12,900 km) | £240 | £480 | −£240 |
| 10,000 miles (UK average, ~16,100 km) | £300 | £600 | −£300 |
| 15,000 miles (~24,100 km) | £450 | £900 | −£450 |
| 20,000 miles (~32,200 km) | £600 | £1,200 | −£600 |
| 25,000 miles (~40,200 km) | £750 | £1,500 | −£750 |
The EV still wins — by less. Off-peak home charging costs around 2p per mile in the UK; add eVED and the running cost rises to about 5p per mile. A petrol car sits at roughly 15p per mile in fuel alone. The gap narrows, but it stays at about two-thirds in the EV's favour.
Not everyone applauded. Toby Poston, CEO of the BVRLA, the UK vehicle rental and leasing association, put the objection plainly: "you can't create a smooth switch to electric vehicles by making them more expensive to own." Vicky Edmonds of EVA England went after the mechanism instead — the scheme "remains too complex, risks leaving people out of pocket and fails to give drivers confidence."
On the public-finance side, the case is harder to argue with. The measure raises £1,100 million for the Treasury in 2028-29, £1,435 million in 2029-30 and £1,865 million in 2030-31, on forecasts certified by the Office for Budget Responsibility. The hit to EV uptake was estimated at around 120,000 fewer sales between 2025-26 and 2030-31 — just 2% of the total expected.
Which European countries already charge EVs per kilometre
The UK is not first. Iceland is.
Since 1 January 2026, Iceland has levied a universal, fuel-neutral kilometre charge — the kílómetragjald, approved by the Alþingi in December 2025. It is not an EV tax: it applies to every road vehicle, whatever powers it. A passenger car up to 3.5 tonnes pays ISK 6.95 per kilometre, roughly 5 cents — more than double the British rate. There are 29 weight brackets, with the heaviest classes reaching ISK 45.17/km (about 31 cents).
The method mirrors Britain's: odometer readings submitted through the Ísland.is government portal every 30 days or at vehicle inspection, with monthly billing that works like a utility bill. And there is a trade-off that matters politically — fuel tax was removed in exchange. Pump prices are expected to fall by ISK 95–105 per litre on petrol (€0.65–0.71) and ISK 80–88 on diesel. Carbon tax stays.
Iceland got here out of necessity. Road-use receipts per kilometre had fallen to about ISK 7 by 2023, down 43% from 2006, with 50–60% of new registrations already electric or plug-in hybrid.
Elsewhere in Europe, it is study papers and little more:
- Switzerland — the Federal Council estimates that roughly CHF 0.056/km on an average EV would offset lost fuel duty. Under consideration, not decided.
- Netherlands — the "Betalen naar Gebruik" (pay as you drive) concept is under investigation.
- France — and here a rumour needs killing: no per-kilometre tax has been voted on, or even formally debated by any French party. What exists is budget pressure. The French Treasury estimates €13 billion less tax revenue by 2035 because of electrification, and the EU's ETS2 carbon market — which France got pushed back from 2027 to 2028 — is expected to add 10–15 cents per litre at the pump.
Then there is the cautionary tale. The Australian state of Victoria charged AU$0.028/km on EVs and AU$0.023/km on hybrids from 2021 — until the High Court struck it down in 2023, ruling it an excise a state had no power to levy. Not every attempt survives contact with the courts.
Will Portugal tax EVs per kilometre?
Start with what is certain: Portugal has no distance-based charge, and none has been announced. No draft law, no consultation, no timetable. If you read a UK headline and concluded you will be billed per kilometre at your next IUC renewal, you read it wrong.
What is equally certain is that the underlying problem is identical. Revenue from ISP — Portugal's fuel products tax — depends on litres sold. Every EV replacing a diesel is revenue that vanishes and is not made up by electricity tax, which is a fraction of the amount. The European scale gives you the size of it: fuel taxes are worth roughly €240 billion a year across Europe, and European fuel tax revenue is projected to fall by nearly $70 billion by 2035 — about two-thirds of the global decline. Germany alone could lose €12.5 billion in 2030 versus 2020, recovering only about €0.75 billion through electricity tax.
Portugal is not exempt from that arithmetic. It is just earlier on the curve.
As for the current tax treatment of EVs in Portugal — exemption from ISV (the registration tax) and a token minimum IUC (the annual circulation tax), with benefits written into legislation through the end of the decade — check the exact figures on the Portal das Finanças before running purchase numbers, because each State Budget adjusts the edges. The principle has held so far: buying electric remains fiscally advantageous in Portugal today.
Frequently Asked Questions
As of August 2026 there is no per-kilometre charge announced, proposed or under public consultation in Portugal. Fully electric cars remain exempt from ISV registration tax and pay an almost symbolic IUC road tax, a framework written into legislation through the end of the decade. The underlying problem is the same one the UK faced — ISP fuel-tax revenue eroding as fewer litres are sold — but Portugal is further back on the electrification curve, so the budget pressure has not yet produced a policy. Always check current rates on the Portal das Finanças before budgeting a purchase.
At the UK rate of 3p per mile — roughly 2.2 cents per kilometre — a driver would pay about 220 euros a year at 10,000 km, 330 euros at 15,000 km and 550 euros at 25,000 km. Under Iceland's heavier rate of ISK 6.95/km (around 5 cents), the same distances would cost roughly 500, 750 and 1,250 euros. These are foreign benchmarks: none of them applies in Portugal today.
Only Iceland has a system in force: since 1 January 2026 it applies the kílómetragjald, a universal, fuel-neutral distance charge of ISK 6.95/km (about 5 cents) for passenger cars up to 3.5 tonnes, in exchange for scrapping fuel duty. The UK has legislated eVED, starting 1 April 2028 and covering some 5.6 million vehicles. Switzerland is studying a charge of about CHF 0.056/km and the Netherlands is investigating its "Betalen naar Gebruik" model. In France no per-kilometre tax has been voted or even formally debated, despite claims circulating on social media.
Both European systems are odometer-based, not GPS — there is no tracking and no location data collected. In the UK, drivers declare an odometer reading and an estimated annual mileage when renewing road tax, pay upfront or in instalments, and reconcile at the end of the period, with MOT data used as a cross-check. In Iceland, readings are submitted through the Ísland.is portal every 30 days or at inspection, with monthly billing. The UK also offers a voluntary connected-car option where the vehicle reports mileage itself.
In the UK yes, but at half the rate: 1.5p per mile for plug-in hybrids versus 3p per mile for battery-electric and hydrogen fuel-cell cars, with electric vans exempt altogether. In Iceland the 2026 charge is fuel-neutral, so a plug-in hybrid pays exactly the same per kilometre as an EV or a petrol car. Portugal has no such charge; plug-in hybrids meeting the electric-range and emissions requirements get a 75% reduction on ISV.
What to watch over the next few years
If the British model becomes the template, three signals would tell you the debate has reached Portugal: changes to how IUC is calculated for EVs, any proposal tying the annual inspection's odometer reading to tax purposes, and the language about ISP revenue erosion in State Budget documents. That is the route a kilometre charge would take — not a surprise decree.
Meanwhile, the calculation that matters if you are choosing a car right now barely moves. Even under the British scenario, with the tax applied, an EV still costs around a third of a petrol car per kilometre driven. A charge of 2 cents per kilometre trims the advantage; it does not erase it. And in Portugal, where it does not yet exist at all, the margin is wider still.