Electric car customers have been handed a massive boost with a major new rule change that came into effect this week. New car tax changes were introduced on Wednesday, with EV buyers set to enjoy major savings.

Under previous rules, every electric car with a list price of over £40,000 would be liable for the luxury car tax charge. This was an additional £425 fee paid over five years from the second to sixth years of ownership, a total of £2,125 over half a decade.

However, as of April 1, 2026, the price threshold for the Expensive Car Supplement on electric cars has been increased from £40,000 to £50,000. It means dozens of electric models will no longer pay the increased £440 ECS fee, saving a total of £2,200.

Experts at DriveElectric explained: "This update better reflects how people actually use electric cars today. Right now, a huge number of family-sized EVs sit in the £40,000-£50,000 bracket. Under the old rules, they were classed as 'luxury', even though they're often the practical, everyday choice for families. That's where this change makes a real difference."

Analysis from Carwow has claimed almost two dozen vehicles that paid the luxury car tax last year would now be exempt from the fee. This includes popular models such as the Audi Q4 e-tron, BMW iX1, Ford Capri and Hyundai Ioniq 5.

Models from leading electric car manufacturers are also set to be exempt, including the BYD Sealion 7, Polestar 2 and Tesla's Model Y and Model 3 Premium.

Siobhan Doyle, Consumer Writer at Carwow, said: "With more EVs now falling below the tax threshold, drivers have a wider choice of models that combine strong value with lower ownership costs."

HM Revenue and Customs (HMRC) explained that the plan to increase the luxury car tax threshold would cost the Exchequer a total of £50million between 2026 and 2027.

However, they claimed that the new rule would "positively impact individuals" who purchase or own an EV first registered from 1 April 2025. Officials said that owners would be able to reduce their VED liability, saving them money.

Electric cars between £40,000 and £50,000 exempt from ECS fee - full list

• Audi Q4 e-tron


• Audi Q4 Sportback e-tron


• BMW iX1


• BMW iX2


• BYD Seal


• BYD Sealion 7


• Cupra Tavascan


• Ford Capri


• Hyundai Ioniq 5


• Hyundai Ioniq 6


• Kia EV4 Fastback


• Lexus RZ


• Mercedes-Benz CLA Electric


• Mercedes-Benz EQA


• Mercedes-Benz GLB Electric


• MG IM6


• Peugeot E-3008


• Peugeot E-5008


• Polestar 2


• Skoda Enyaq Coupe


• Tesla Model 3 Premium


• Tesla Model Y


• Tesla Model Y Premium