A new analysis from the UK-based retailer Marshall Motor Group has revealed that more than 426,000 vehicles have been subject to the ‘luxury car tax’ of the government in the past year.
The findings have prompted Chancellor Rachel Reeves to increase the luxury car tax threshold for electric vehicles (EVs) to £50,000 beginning April 2026.
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Data released by the Driver and Vehicle Licensing Agency (DVLA) through a Freedom of Information (FOI) request showed that from the 2022/2023 financial year to 2024/2025, the number of fuel, electric, and hybrid vehicles subject to the Expensive Car Supplement (ECS) rose by 42%, from 299,553 to 426,758.
The £40,000 ECS threshold was introduced in 2017 with the intention of applying primarily to high-priced vehicles.
However, current figures reveal that a greater number of standard cars are now included due to higher production costs and growing adoption of hybrid and electric models.
From April 2025, new electric vehicles became liable for Vehicle Excise Duty, including an annual Expensive Car Supplement (ECS) charge of £425 starting from the second year of ownership.
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By GlobalDataAccording to FOI data, between April and September 2025, there were 119,203 EVs registered at £40,000 or above.
The revenue generated from these registrations is estimated to exceed £50m each year through the ECS.
Marshall Motor Group motoring expert Ben Welham said: “The FOI data shows just how many modern cars have ended up above the £40,000 threshold. These are vehicles that many drivers wouldn’t consider ‘expensive’ by today’s standards. The threshold rise to £50,000 for EVs is a sensible update and reflects how pricing has evolved since 2017.”
From April 2026 onwards, petrol, diesel and hybrid models will continue under the existing £40,000 limit while the ECS threshold for EVs will rise to £50,000.
Hybrid vehicles remain prominent within this tax category; their numbers have more than doubled in two years—from 116,568 in 2022/23 to 247,613 in 2024/2025.
Meanwhile, diesel-powered vehicles in the bracket have fallen from 68,488 in 2022/2023 to 31,091 in 2025/2026.
Many electric cars are now priced between £40,000 and £50,000.
By raising the threshold for EVs next year, fewer electric models will be subject to this additional tax.
The FOI data was obtained via a request covering January 2022 through September 2025 and sourced from the Driver and Vehicle Standards Agency (DVSA).
