The most successful new Chinese car manufacturers in the UK have responded to the Chancellor’s latest sting on electric vehicles by introducing a new deal that mitigates its financial impact.
Chancellor Rachel Reeves announced on Wednesday an additional eVED tax on EVs with a 3p per mile charge that will come into force in April 2028.
The Office for Budget Responsibility (OBR) estimates that it will cost EV drivers an extra £255 in the fiscal year 2028-29 if they drive 8,500 miles annual – and this will be on top of the standard rate of VED, which currently stands at £195.
But to make sure new EV buyers aren’t stung, Omoda and Jaecoo – sub-brands of Chery, China’s largest car export – have introduced their own ‘EV Tax Rebate’ on their two all-electric models.
The Omoda E5 and Jaecoo E5 electric SUVs will come with a tax rebate equivalent to 20,000 miles at 3p per mile.
While the Treasury’s road pricing tax will not come into effect for another three years, Omoda and Jaecoo say the saving can be used immediately on vehicles purchased through its joint national retailer network.
Omoda and Jaecoo – sub-brands of Chery, China’s largest car export – have introduced their own ‘EV Tax Rebate’ on their two all-electric models to help EV buyers who will have to pay the new EV pay-per-mile tax from 2028
As long as the vehicle has an approved 48-month finance agreement and orders are placed and accepted by 31 December, new Omoda and Jaecoo customers can enjoy their EVs with the manufacturer-funded saving.
The new Chinese co-brands say this ensures that the value of the rebate remains relevant over the full four-year term. In this way it effectively pre-covers a portion of the future tax burden during the life of the agreement.
The EV Tax Rebate is designed to ‘ensure customers can immediately benefit from lower running costs and reduced lifetime ownership expenditure at a time when electric vehicles are becoming increasingly central to the UK’s transport and decarbonisation strategy’.
The OBR says the average £255-a-year charge to EV owners is roughly equivalent to half the rate of fuel duty tax paid per mile by drivers of petrol and diesel vehicles.
The Omoda and Jaecoo EV Tax Rebate intends to offset between two and three-years’ worth of this new pay-per-mile EV tax.
Chancellor Rachel Reeves announced this afternoon that electric vehicles will be subject to a 3p per mile road pricing charge from April 2028 that she says ‘is only right’ EV owners pay
Omoda E5: The electric SUV and Jaecoo E5 small electric SUV will come with a tax rebate equivalent to 20,000 miles at 3p per mile
Gary Lan, CEO of Omoda and Jaecoo, said: ‘The Budget introduces a new 3p-per-mile EV tax from 2028-2029, and we want to make the transition to electric driving as smooth as possible for our customers immediately – not three or four years from now.
‘Our EV Tax Rebate for the Omoda E5 and Jaecoo E5 effectively covers the first few years of this new tax, giving drivers the equivalent of thousands of miles of zero-cost motoring.
‘These vehicles represent the forefront of electric mobility, and this initiative reflects our commitment to making clean, efficient, and intelligent transportation more accessible to UK drivers from day one.’
Jaecoo E5: The Omoda and Jaecoo EV Tax Rebate intends to offset between two- and three-years’ worth of this new pay-per-mile EV tax. The vehicle has to be bought through the OJ network with an approved 48-month finance agreement and orders need to be placed and accepted by 31 December
Omoda launched in the UK in August 2024 and Jaecoo in January 2025, and yet combined the two Chinese brands surpassed 25,000 sales by August this year.
In September alone they jointly sold over 10,000 vehicles and achieved a 3.45 per cent market share making both brands some of ‘the fastest-growing and most in-demand automotive brands in the country’.
They’ve quickly established themselves as offering affordable, tech-heavy crossover and SUV models that deliver a lot for the money, especially compared to many European premium car makers.
Lan comments: ‘We’re building trust, proving ourselves, and giving customers more than they expect.’
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