One of the UK’s most popular Chinese electric car brands has promised to pay drivers pay-per-mile charges in a blow to Rachel Reeves’ Budget plan. Jaecoo and Omoda have confirmed it will launch its own EV Tax Rebate scheme, offering up to 20,000 miles completely free of charge.
Those buying an all-new electric Omoda E5 or Jaecoo E5 can secure the manufacturer-funded savings immediately if purchased under certain finance agreements. It means road users are saving money now, but are effectively pre-covering a portion of the future tax burden, ensuring customers can immediately benefit from lower running costs. Jaecoo is slowly becoming one of the UK’s most popular Chinese brands with over 20,000 models registered in the UK in 2025.
READ MORE: Electric car drivers face nightmare pay-per-mile checks
READ MORE: Rachel Reeves accused of ‘confused’ message as drivers hit with £300 charge
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy PolicyGary Lan, CEO of Omoda and Jaecoo UK, said: “Today’s 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.”
According to Omoda and Jaecoo, the average EV travels around 8,740 miles each year. It means the company intends to cover between two and three-years worth of pay-per-mile EV tax fees under their rebate programme.
In the run-up to the Budget, there was concern that the decision to introduce higher taxes on electric cars could backfire. Most importantly, there were fears that road users would be put off from making the switch to EVs if they were forced to pay more.
A WhatCar? poll of 4,368 individuals found the charge would deter 52% of motorists from making the switch.
Ms Reeves has introduced an EV pay-per-mile fee to offset the loss of fuel duty revenue as more drivers make the switch away from petrol and diesel vehicles.
Speaking in the House of Commons on Wednesday, the Chancellor said; “Because all cars contribute to the wear and tear on our roads, I will ensure drivers are taxed according to how much they drive and not just by the type of car they own, by introducing the Electric Vehicle Excise Duty on electric cars.
“This will be payable each year alongside Vehicle Excise Duty at 3p per mile for electric cars and 1.5p for plug-in hybrids, helping us to double road maintenance finding in England over the course of the Parliament.”
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