Sadiq Khan’s proposed hikes to the Congestion Charge are expected to raise millions in additional revenue over the coming five years, with drivers footing the bill. [emphasis, links added]
A recent Freedom of Information (FOI) request found that the increase in road charging from £15 to £18 (US$20–24) is estimated to bring in between £415 million ($563M) and £455 million ($618M) for Transport for London, with electric car drivers being impacted the most.
The financial windfall will primarily come from removing the current exemption for electric vehicles and raising the daily charge by 20 percent.
The FOI revealed that ending the electric car exemption alone will generate between £75 million ($102M) and £83 million ($113M) annually.
These changes mark a significant policy shift that will particularly affect thousands of motorists who have invested in electric vehicles in the capital to help support the Government’s ambitious Zero Emission Vehicle mandate.
The mandate requires all new car sales to be electric by 2035, with at least 28 percent electric by the end of the year before moving to 100 percent in the next decade.
As more drivers switch to electric, there has been a decline in tax collections, which has prompted changes to the way road charges operate across London.
As a result, TfL announced that electric cars will lose their longstanding exemption from the Congestion Charge on December 25, 2025. Just one week later, on January 2, 2026, all motorists entering the charging zone will face an increased daily fee.
The exemption for battery-powered and hydrogen fuel cell vehicles has been in place since October 2021, when it replaced a broader discount that previously included hybrid vehicles.
It was a key incentive alongside Vehicle Excise Duty tax breaks in helping drivers give up petrol and diesel cars.
According to reports, TfL has confirmed that its Congestion Charge income is expected to rise from £240 million ($326M) in the 2024/25 financial year to £320 million ($434M) by 2026/27. The charging zone operates between 7 am and 6 pm on weekdays and noon to 6 pm on weekends and bank holidays.
Once the new rate takes effect next year, motorists who drive into central London five days per week will face annual costs of £4,140 ($5,619) once the new rate takes effect, based on 46 working weeks per year.
Top image via The Sun/YouTube screencap
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