Business
What taxes apply to electric vehicles and when will new petrol and diesel cars be banned?
Katy AustinTransport correspondent
Getty ImagesA new tax for drivers of electric vehicles (EVs) could be announced by Chancellor Rachel Reeves in her 26 November Budget.
“Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles,” a government spokesperson told the BBC. “We want a fairer system for all drivers.”
All new cars will have to be electric or hybrid from 2030, when a ban on the sale of new petrol and diesel cars comes into force.
Why are new petrol and diesel cars being banned?
The move is part of UK government efforts to meet a legally binding aim of achieving “net zero” by 2050. That means not emitting more greenhouse gases than are removed from the atmosphere.
Domestic transport – including cars, buses and trains – was responsible for more than a quarter of emissions in 2023, making it the largest emitting sector.
Ministers have committed to banning the sale of new petrol and diesel cars in 2030.
That means all new cars will have to be electric, or hybrid – with both an internal combustion engine and electric motor.
UK drivers will be able to buy new hybrids until 2035.
The EU won’t ban sales of new fossil fuel-powered cars until 2035.
What taxes apply to electric vehicles?
There is no electric vehicle equivalent of the fuel duty paid by drivers of petrol and diesel cars.
But on 1 April 2025, Vehicle Excise Duty became payable on EVs for the first time.
For new cars, the payment in the first year is £10, rising to the standard rate of £195 in the second year. Those registered between April 2017 and March 2025 pay £195 from the start.
Electric cars registered after that date and costing more than £40,000 are also subject to the “luxury car tax” of £425 per year. This is payable for five years from the second time the vehicle is taxed.
Ahead of the Budget, the Treasury has reportedly been weighing up whether to consult on a “pay-per-mile” tax on EVs from 2028.
The Telegraph reported that EV drivers could be charged 3p per mile, on top of other road taxes, amounting to an extra £12 on a journey from London to Edinburgh.
It is unclear how such a scheme would be enforced, with reports that motorists would pay according to their own estimate of how much they expected to drive.
The AA said the government needed to “tread carefully” to avoid slowing down the transition to EVs. Ford said taxes on electric vehicles may put drivers off buying them at a time when demand has “lost momentum”.
In London, drivers of electric vehicles will have to pay the congestion charge from 2026.
How many electric cars are on UK roads?
UK sales of new fully electric cars have been growing steadily.
The number registered rose from 29,800 in October 2024 to 36,800 in October 2025, car industry trade association the SMMT said.
The figure was equivalent to a quarter of new car registrations. The goal is to increase this to 80% by 2030.
The second hand market is also growing, but from a low base. SMMT data shows that about 80,600 used electric cars were purchased between July and September. That’s 4% of second hand sales.
Analysis by ZapMap, an electric charger mapper and data provider, suggests that there are now at least 1.7 million fully electric cars on UK roads, about 5 per cent of the total.
Cars with combustion engines still make up the vast majority of cars and people will still be able to drive them after 2035.
How much do electric cars cost to buy and run?
The government recently announced a subsidy scheme for new EVs. Grants are available of up to £3,750 for eligible models priced at £37,000 or below.
It is hoped the scheme will make it easier for people to switch to electric.
The AA said drivers “frequently tell us that the upfront costs of new EVs are a stumbling block to making the switch to electric”.
For second hand cars, online marketplace Autotrader says it’s “seeing plenty of examples where electric cars are the same price or lower than similar petrol models, specifically in the three to five-year age group”.
In addition, about 680,800 electric cars are now being leased, the British Vehicle and Leasing Association (BVRLA) said. That’s nearly half of all leases.
When it comes to running costs, electric charging can be cheaper than petrol or diesel. But it depends where you charge.
Charging at home – for those who have the option – is significantly cheaper, especially on an off-peak tariff.
Home charging qualifies for the 5% rate of VAT on domestic energy, compared to the standard rate of 20% for public charging.
Prices can vary a lot when using public charge points, depending on factors including the speed of the charger and the time of day. Certain apps offer discounted charging rates.
The fastest, “Ultra-rapid” charging on the public network may even work out as more expensive per mile than fossil fuels.
Motoring groups say electric cars are generally cheaper to maintain.
Is there enough charging infrastructure?
The range of electric cars has improved, as has the number of public charge points. But concerns remain about having enough of them around the country.
Data from Zapmap shows almost 87,000 across the UK, in about 44,000 locations. Those include places like supermarket car parks and lamppost chargers.
In March, a report by the Public Accounts Committee of MPs said availability on motorways was still “patchy”.
It said the government was on track to reach the minimum 300,000 points needed by 2030. However, it added that “too few have been installed outside of the South East and London, which currently host 43% of all charge points”.
The report also raised “concerns around the impact on drivers with disabilities, those without access to off street parking and disadvantaged groups”.
New Delhi: InterGlobe Aviation, parent of IndiGo airlines, on Tuesday informed that it received a penalty order of around Rs 117.52 crore from the Joint Commissioner of Central Tax and Central Excise, CGST Kochi Commissionerate.
The order, which issued a penalty of Rs 1,17,52,86,402, relates to the denial of input tax credit for the financial years 2018–19 and 2021–22, the airline said in an exchange filing.
“The department has denied input tax credit (ITC) availed by the company and has issued a demand order along with a penalty,” the filing said.
“The company believes that the order passed by the authorities is erroneous. Further, the company believes that it has a strong case on merits, backed by advice from external tax advisors,” it further said.
Accordingly, the company will contest the same before the appropriate authority, it added.
InterGlobe Aviation added that the order does not have a significant impact on its financials, operations or other activities of the company.
“There is no significant impact on financials, operations or other activities of the Company,” it added in its regulatory filing.
Interglobe Aviation Limited shares dipped by Rs 95 or 1.64 per cent in intra-day trading. The shares had opened almost flat at Rs 5,794.50 apiece.
The carrier on November 29 announced new direct routes and frequency additions from Navi Mumbai International Airport (NMIA), strengthening connectivity from the newly inaugurated gateway to key domestic destinations such as Coimbatore, Chennai, Vadodara and North Goa.
IndiGo earlier this week said it has completed the update on the mandatory Airbus system enhancement across its A320-family fleet after global flight operations were disrupted due to a software issue in the Airbus A320 family of aircraft.
All 200 aircraft have now been fully updated and compliant as required, said the Indian carrier.
Meanwhile, earlier in the day, an IndiGo flight from Kuwait to Hyderabad was diverted to Mumbai after authorities at Hyderabad Airport received a bomb threat.
Official sources confirmed that flight 6E-1234 was diverted midair after a threat message was received at the customer support at Rajiv Gandhi International Airport (RGIA) at 05.12 a.m.
Business
Meesho IPO Opens Tomorrow: From Price Band To Lot Size And More, Here Are10 Key Things To Know
Meesho, India’s leading e-commerce platform, is slated to launch its highly anticipated IPO from 3 to 5 December 2025. The e-commerce company has set the Meesho IPO price band at Rs 105 to Rs 111 per equity share. Meesho is today the leading e-commerce player in India in terms of order volume as well as one of the country’s most popular shopping apps.
Here’s a list of important Meesho IPO details to help you make an informed investment decision.
1. IPO date
The e-commerce firm’s public issue will be open for subscription from December 3 to December 5, 2025.
2. IPO price
The Bengaluru-based company has set a price band of Rs 105 to Rs 111 per share.
3. IPO size
The e-commerce company plans to raise Rs 5,421 crore. Out of this amount Rs 4,250 crore is intended through the issuance of fresh shares and the remaining Rs 1,171.20 crore is reserved for the OFS route. At the high end, Meesho’s valuation stands at Rs 50,096 crore.
4. IPO lot size
A bidder will be able to apply for the upcoming IPO in lots with each lot of the book build issue comprising 135 company shares.
5. Minimum investment
A retail investor would require a minimum investment of Rs 14,985 to bid for at least one lot and in multiples thereafter.
6. IPO allotment date
The allotment of shares is expected to be finalised on December 8, 2025.
7. Allottees’ share
The successful allottees will receive the company’s shares in their respective demat accounts on December 9, 2025.
8. IPO listing date
The public issue is proposed for listing on the BSE and the NSE with the most likely date for share listing on 10 December 2025.
9. IPO registrar
KFin Technologies is the official registrar of the fresh capital-cum offer for sale.
10. IPO lead managers
Kotak Mahindra Capital, JP Morgan India, Morgan Stanley India, Axis Capital and Citigroup Global Markets India are the lead managers of the public issue.
The federal government is reportedly considering the abolition of one of the schemes for importing used cars while proposing stricter regulations for the two remaining schemes.
The Ministry of Commerce has submitted a summary to the Economic Coordination Committee (ECC) of the cabinet, recommending the discontinuation of the Personal Baggage Scheme.
The other two schemes — Transfer of Residence and Gift Scheme — are being proposed for tighter regulation, with measures suggested to curb misuse.
“Different proposals are under consideration to tighten the Gift and Transfer of Residence schemes, while the Baggage Scheme is expected to be abolished. The ECC will take the final decision on this matter,” confirmed senior government sources.
The auto industry has strongly opposed large-scale imports of used vehicles, citing concerns over the potential impact on local manufacturing.
The sector presented data covering December 2024 to October 2025, showing a sharp resurgence in used-car imports during this period.
In contrast, regional peers maintain very limited used-car inflows: India reports virtually zero imports, Vietnam stands at 0.3%, and Thailand at 1.2%.
The industry argues that such restrictions are intended to protect domestic automotive value chains.
Pakistan has taken a different approach. After Notification 1895 issued by the Ministry of Commerce on September 30, 2025, imports of vehicles up to five years old were permitted.
Reports indicate that after June 2026, this age limit may be removed entirely, potentially opening the market to large-scale inflows of aged vehicles.
The local auto industry is a key contributor to the economy, comprising roughly 1,200 factories, providing 2.5 million jobs, generating Rs500 billion annually in government revenue, and attracting approximately $5 billion in foreign investment.
“Import-friendly policies risk diluting these gains at a time when industrial revival and localisation are declared priorities,” said Shehryar Qadir, Senior Vice Chairman of the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM).
Of the 45,758 vehicles imported into Pakistan between December 2024 and October 2025, nearly 99% came from Japan, which aligns with local right-hand-drive standards.
Other countries contributed minimal numbers: Thailand (130 units), the US (55), Jamaica (49), Germany (47), Australia (22), China (20), and the UAE (5).
The industry estimates that local vendors faced losses of roughly Rs50 billion during this period.
The impact on foreign exchange is also significant: while documented banking-channel imports for local manufacturers cost around $10,138 per vehicle, used-car importers reportedly spend about $14,010 per unit, much of it through informal channels.
While the government is drafting a new Auto Policy to strengthen domestic manufacturing, stakeholders remain split on whether localisation efforts can succeed alongside a liberal used-car import regime.
The data suggests that Pakistan is an outlier among manufacturing economies — both in policy direction and market outcome.
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