From April 2025, 59 car models from 24 popular brands will face substantial increases in Vehicle Excise Duty (VED), with hikes reaching up to £2,745. Major manufacturers such as Ford, BMW, and Mercedes will be hit particularly hard due to significant changes in VED rates, announced as part of the Autumn Budget. These increases will impact vehicles with higher emissions, including many mid-market models, luxury cars, and hybrids.
A Sliding Scale of Taxation
Under the new system, first-year VED charges will rise on a sliding scale, with many vehicles seeing their fees double from 2024 levels. Cars producing more than 255 g/km of CO2 will face the highest increases, with a rise of up to £2,745 for the first year of registration. This will impact a wide range of popular vehicles, including those from brands like Ford, Toyota, BMW, Mercedes, and Audi, as well as high-end models from Porsche, Lamborghini, and McLaren.
Which Car Brands Are Affected? Ford, BMW, Mercedes, and More
Among the vehicles most affected are common models from Ford and Toyota, alongside those from premium brands such as BMW, Mercedes, and Audi. Luxury manufacturers like Porsche, Lamborghini, and McLaren are also set to face significant tax hikes. These models are not only popular for their performance but also known for their high levels of emissions, placing them squarely in the crosshairs of the new taxation system.
Why Are First-Year VED Rates Increasing?
The increase in first-year VED rates is part of a broader government effort to accelerate the transition to electric vehicles (EVs) and reduce emissions. Back in October, Chancellor Rachel Reeves announced that drivers of new petrol, diesel, and hybrid cars would face higher first-year tax rates, with the aim of making zero-emission vehicles more appealing. The new tax rates will be determined based on a car’s CO2 emissions, with a wider gap being created between EVs and traditional combustion engine vehicles.
Currently, electric vehicles incur no VED charge for the first year. Cars emitting between 111 and 150 g/km of CO2 will pay £220. Vehicles producing more than 255 g/km will be hit with the maximum charge of £2,745 for their first year. In contrast, from April 2025, EVs will only face a nominal £10 charge for their first year of VED. This makes EVs significantly more attractive from a tax perspective.
For example, a Ford Puma buyer will see their first-year VED rise from £220 to £440, while those purchasing a Range Rover could face an increase of up to £5,490. These increases are significant, particularly for consumers who have already chosen higher-polluting vehicles for their performance or lifestyle benefits.
Encouraging the Shift to Electric Vehicles
The primary aim of these VED hikes is to create stronger financial incentives for consumers to choose electric vehicles, thus promoting a cleaner and greener vehicle fleet. The government’s policy is designed to create a clearer financial distinction between zero-emission cars, hybrids, and internal combustion engine (ICE) vehicles, with the latter two types facing much higher taxes. These changes are also meant to make the transition to electric vehicles more appealing by making the financial case for EVs stronger.
EVs will continue to benefit from tax incentives, and additional financial support has been confirmed in the government’s Company Car Tax regime and through 100% first-year allowances for zero-emission cars and EV charge points, which will be extended for a further year.
Full List of Affected Car Models
- Audi RS6 4.0 TFSI V8
- Audi S8 4.0 TFSI V8
- McLaren GT 4.0T V8
- Audi R8 5.2 FSI V10
- Lamborghini Huracan 5.2 V10
- Chevrolet Corvette Stingray 6.2 V8
- Volkswagen Amarok 3.0 TDI
- Aston Martin DBX 4.0 V8
- Ferrari Roma 3.8T V8
- Audi SQ7 4.0 TFSI V8
- Range Rover Sport 4.4P V8
- Jaguar F-Pace 5.0 P575 V8
- Aston Martin DB12 4.0 V8
- Porsche 911 3.7T 992 Turbo
- Jeep Wrangler 2.0 GME
- Ford Ranger 2.0 TD EcoBlue
- Audi RSQ8 4.0 TFSI V8
- Lotus Emira 3.5 V6
- Bentley Continental 4.0 V8
- Audi SQ8 4.0 TFSI V8
- Aston Martin Vantage 4.0 V8
- Toyota Hilux 2.8D
- Porsche Macan 2.9T V6
- Mercedes-Benz SL55
- Range Rover 4.4 P530 V8
- Mercedes-Benz AMG GT 4.0 V8
- Porsche 718 Cayman 4.0 GT4
- Lamborghini Urus 4.0 V8 BiTurbo
- Audi RS7 4.0 TFSI V8
- Ford Mustang 5.0 V8
- Toyota Land Cruiser 2.8D
- Bentley Continental 6.0 W12
- Mercedes-Benz GLC63
- Ford Ranger 3.0 V6
- INEOS Grenadier 3.0P
- Range Rover 4.4 P615 V8
- Land Rover Defender 90 5.0 P425 V8
- Rolls-Royce Ghost 6.75 V12
- Ford Ranger 3.0 EcoBlue
- Mercedes-Benz G63
- Ferrari Purosangue 6.5 V12
- Rolls-Royce Cullinan 6.75 V12
- Alfa Romeo Stelvio 2.9 V6 Bi-Turbo
- Mercedes-Benz GLE63
- Maserati Levante 3.0 V6
- Porsche Cayenne 4.0T V8
- BMW M8 4.4 V8
- Maserati MC20 3.0 V6
- Land Rover Defender 110 5.0 P425 V8
- Mercedes-Benz G400D
- Lamborghini Revuelto 6.5 V12
- Bentley Bentayga 4.0 V8
- BMW X7 M 4.4 V8
- BMW X6 M 4.4 V8
- BMW Alpina XB7 4.4 V8
- Bentley Flying Spur 4.0 V8
- Maserati Levante 3.8 V8
- BMW X5 M 4.4 V8
- Mercedes-Benz GLS63h
These vehicles are among the most polluting on the road, and owners will feel the impact of the new VED rates. For high-performance car owners, the cost of this new tax system will certainly be a significant factor in their purchasing decisions moving forward.
A Transformative Approach to Car Taxation
The VED reform represents a major shift in UK car taxation, aligning it more closely with environmental goals. As the government aims to cut its carbon footprint and reduce air pollution, the tax system will be used to encourage the adoption of greener vehicles while discouraging the use of high-emission models.
While this is undoubtedly a step forward in tackling climate change, it also raises questions about fairness, particularly for buyers of mid-range or luxury vehicles who may not be in a position to switch to electric alternatives immediately.
Got a reaction? Share your thoughts in the comments
Enjoyed this article? Subscribe to our free Newsletter for captivating articles, exclusive content, and the latest news.
