eVED: what the UK can learn from international models
eVED is on its way. In this guest blog post, Tim Wray from Kapsch explores different ways in which electric vehicle mileage might be measured, reported and paid for.
“The UK is heading towards a significant funding gap as people shift from petrol to electric vehicles and revenue from fuel duty steadily erodes. In response, from 2028, the UK government is introducing Electric Vehicle Excise Duty (eVED) – a new pay-as-you-drive form of vehicle taxation for electric vehicles as an alternative to fuel duty.
Having consulted on the new system, the Government has now outlined more details about how mileage will be measured, reported and paid for. Many countries are already experimenting with different models that offer useful lessons for the UK, both in what works and what needs refining.
Simplicity as a starting point
Simplicity is at the core of eVED’s design. It will work by drivers paying upfront for estimated annual mileage though the existing VED system, which is then verified by reading their odometer at the annual MOT. This solution is easy to implement, simple to understand, and privacy-friendly.
Several international markets have chosen straightforward, mileage-based approaches as an entry point. These models prioritise ease of implementation and transparency over precision, helping governments establish the principle that road use should be tied to contribution and avoiding heavy infrastructure investments.
Providing flexibility through choice
The downside of the simple odometer read approach is that it requires drivers to estimate their mileage and pay in advance for the whole year, which would not suit everyone. Following the consultation, the government confirmed plans for an optional connected-vehicle functionality. This means the vehicle’s telematics will automatically convey mileage to the charging authority on a regular basis without sharing journey-level location data. This would make reporting easier and enable drivers to pay monthly for the exact mileage that they have driven. Drivers may like to choose this option if they prefer a more accurate and automated experience.
In enabling this approach, the UK government is providing flexibility through choice. While some motorists prefer more traditional arrangements and greater control over how vehicle data is shared, others are happy to use connected services that simplify administration. The Government is supporting both approaches, and experience across Europe certainly shows that different models are needed for different market segments.
The limits of a simple approach
At the same time, the simple telematics approach has its limitations. While the UK Government’s consultation response rules out a more advanced, location-based option, such an option can provide a way to improve fairness. The current scheme design means that mileage is charged universally, even if one drives abroad. Also, hybrids are charged at half the rate of fully electric vehicles under the assumption that they are driven in electric roughly half the time.
The Government position is that these situations are uncommon, and therefore it is proportionate to make these assumptions for the sake of simplicity and privacy. However, detecting location through satellite-based technology can ensure that driving abroad is not charged, and that hybrids are charged depending on the exact proportion they drive in electric mode rather than over- or under-paying. Technology can also enable varying charging levels depending on certain factors, further enhancing fairness.
Again, transparency and user choice remain the defining factors. Some drivers will be comfortable sharing location data (in line with all relevant data protection regulations) in exchange for more tailored pricing. Others will prefer simpler models that rely on mileage alone.
Across Europe, satellite-based and telematics solutions continue to demonstrate how charging can be tailored to different policy objectives such as reducing peak-time congestion or differentiating between urban and rural drivers. Here at Kapsch, we have successfully piloted such an approach in Norway and continue to operate Bulgaria’s nationwide satellite-based truck tolling system, demonstrating the flexibility and scalability of these technologies where policymakers choose to deploy them.
From capability to implementation
The technology for a smarter system is mature. It can process large volumes of data, integrate with vehicles and smartphones, and scale nationally without the need for extensive roadside infrastructure. At Kapsch alone, we are processing over 100 million satellite positions per day, and more than 1 billion transactions per year.
Our experience in Lithuania gives a good sense of what modern charging can look like when it is designed around users rather than infrastructure. There, Kapsch is delivering a satellite-based tolling system that uses a smartphone app, covers 2,851 kilometres of roads and gives users a range of payment options. This approach reduces the need for physical roadside infrastructure, cuts operational costs, and gives full transparency to end users.
The UK Government is clear about why eVED is needed. Replacing fuel duty revenue that will gradually decline with the growth of electric mobility is essential for maintaining public services. The UK has the advantage of learning from markets that are already navigating similar systems. By committing to an opt-in technology solution for mileage reporting, policymakers have acknowledged that digital tools will be essential to providing an option that is accurate, efficient, and user-friendly.
With a range of technologies available – from simple entry models to more advanced, location-aware options – the system can evolve over time and offer motorists greater choice. Embracing their full potential could deliver greater flexibility for network management, help address cross-border travel challenges, and provide richer insights for future transport planning – while balancing fairness, privacy, simplicity, and network efficiency as mobility continues to change.”
