Used EV uptake threatened by charging costs, eVED tax

April 8, 2025 — The used electric vehicle market in the UK is facing a fresh wave of uncertainty, with dealers pointing to high public charging fees and a proposed mileage-based tax as the top threats to growth. A new survey from Startline Motor Finance, based on its latest used car tracker, found that 53% of dealers rank high charging costs and new tax legislation as the biggest obstacle to expanding the second-hand EV segment. A further 52% said the planned introduction of the pay-per-mile Electric Vehicle Excise Duty, or eVED, would hit sales.

The same tracker identified other notable concerns. Almost half of dealers (48%) flagged the lack of home charging options for people living in terraced houses and apartments. Another 38% mentioned confusion around the UK’s Zero Emission Vehicle Mandate, which requires a rising share of new car sales to be zero-emission, as a compounding problem.

Startline Motor Finance CEO Paul Burgess said the survey was designed to capture dealer sentiment as more EVs enter the used fleet. “We wanted to find out what dealers believe is stopping more motorists from making the switch,” he said. Burgess called eVED the easiest of the three major problems to solve, noting it may yet be dropped under political pressure. Charging issues, in his view, are far harder to address. While government funding for on-street chargers has increased, installations in terraced neighbourhoods and apartment blocks remain scarce. Public charging prices, he added, are closely tied to the cost of installing hardware and buying electricity at commercial rates.

eVED, as proposed, would apply to electric cars a per-mile duty designed to replace lost fuel tax revenue. However, dealers argue that adding a usage charge on top of already high public charging rates would discourage cost-conscious used EV buyers. The policy has been widely contested, with industry groups calling for a simpler annual tax or no additional levy at all. As of this month, the measure has not been enacted, and lobbying against it continues.

The UK situation offers a useful comparison for American drivers and dealers. While the US has no equivalent federal mileage tax for EVs, a growing number of states have introduced or raised annual registration fees for electric vehicles. Some of these fees are designed to compensate for lost gas taxes, but they add to the total cost of EV ownership. At the same time, public DC fast chargers in the US often price above $0.40 per kilowatt-hour, which can make charging-only EV operation nearly as expensive as running a gasoline car. Apartment dwellers across most US cities still find reliable overnight Level 2 charging unavailable, forcing many to rely on workplace or shopping-centre chargers.

The British research is a reminder that used EVs are especially sensitive to recurring costs. Purchase incentives matter, but motorists also weigh energy prices, taxation, and the convenience of charging before committing. In the US, the Inflation Reduction Act still offers a $4,000 tax credit for eligible used EVs, but the credit is capped by purchase price and income limits, and it requires a participating dealer. Even with that support, high electricity prices and limited multi-family charging could blunt demand.

From an industry perspective, the used EV market is still growing in both countries, yet growth is uneven. Dealers in the UK see the biggest immediate threat in a new tax that singles out electric car owners. In the US, state-level fee increases are less visible but have a similar chilling effect. Public-private investment in charging infrastructure is essential, but it must be paired with predictable tax policy and transparent pricing on energy.

Burgess concluded by saying that the industry cannot rely on falling purchase prices alone to attract used EV buyers. The total cost of ownership — including energy, charging access, and taxation — must be competitive with petrol or diesel models. Until that gap narrows, dealer confidence will remain cautious.

The findings come at a moment when used EV inventory is rising, making the strategic choices around taxation and charging more urgent. For buyers, the immediate takeaway is to compare home charging potential, available public rates, and state or national tax changes before entering the market. For policymakers, the message from dealers is clear: complexity and hidden costs are the fastest way to stall EV adoption.