Best Guide to London’s New EV Congestion Charge Discounts and What It Means

Shoppers and drivers are watching as Transport for London trims the electric vehicle (EV) congestion charge exemption, a move that changes discounts from January 2026 and matters for motorists, couriers and businesses across the capital. Here’s a clear, practical guide to the changes, why critics say it’s a backward step, and how to prepare.

Essential Takeaways

• Discounts are shrinking: From 2 January 2026 EV cars will get a 25% auto-pay discount, falling to 12.5% in 2030; electric vans, HGVs and quadricycles get 50% in 2026, dropping to 25% in 2030.
• Cleaner Vehicle Discount ends: The current CVD, which effectively removed the charge for many EVs, runs until 25 December 2025 and will not continue in its present form.
• Uptake rose fast: Since CVD began in 2019, EV registrations in central London jumped from about 20,000 to over 116,000 by early 2025.
• Balance and backlash: TfL argues the tiered discounts still incentivise switching to EVs while keeping congestion charging effective; the AA warns this could slow uptake and harm air quality.
• Practical step: If you drive in the Congestion Charging Zone, register for Auto Pay to access the new discounts and check pricing before planning regular trips.

Why TfL says the new tiered discounts are a practical compromise

TfL describes the changes as a careful recalibration: keeping incentives for cleaner vehicles while ensuring the Congestion Charge does its job in cutting traffic. The authority insists that tiered discounts will still make EVs cheaper to run than petrol cars, at least initially, and that the system encourages gradual adoption rather than rewarding early adopters indefinitely.

You’ll notice this in the numbers. TfL points out nearly sixfold growth in EVs registered in the zone since the Cleaner Vehicle Discount began in 2019, and predicts EVs will approach 20% of vehicles in the charging zone by the end of the year. That visual shift , more plug-in vans and cars on inner London streets , is exactly what TfL says it wants to nurture, while reintroducing some charge to manage demand.

TfL frames the move as forward-looking but pragmatic. For commuters and businesses, though, it feels like a change of pace: helpful for some, stingy for others who expected a longer runway of full exemption.

Why critics say rolling back the exemption could backfire on air quality

And here’s the catch: organisations like the AA are alarmed. Edmund King, the AA president, called the rollback “a backwards step” that risks slowing the switch to EVs and ultimately weakening air quality improvements. The argument is straightforward , many drivers and small businesses still need incentives to make the switch, and removing them too quickly could keep older, dirtier vehicles on the road.

There’s also a human side. Tradespeople and courier drivers often weigh short-term costs closely, and a sudden extra daily charge can tip decisions the wrong way. That’s why voices from the AA and some business groups say phasing out generous discounts before infrastructure and affordability are fully in place might be counterproductive.

TfL counters that the phased reduction still leaves meaningful discounts and that public money shouldn’t indefinitely fund complete exemptions. This tension between climate ambition and cost fairness is the story of the new scheme.

How the new discounts work and what to expect in 2026 and beyond

From 2 January 2026 the headline changes land: electric vans, HGVs and quadricycles on Auto Pay get a 50% discount, while electric cars on Auto Pay receive a 25% discount. That’s followed by a second phase on 4 March 2030, when those discounts fall to 25% and 12.5% respectively.

In practice that means you’ll want to be registered for Auto Pay to access the lower rates automatically. If you drive into the Congestion Charging Zone occasionally, check the daily charge math , the reduced discount may still be worth it, but the savings are smaller than under the Cleaner Vehicle Discount.

For businesses that run fleets, the phased schedule gives some time to plan. Fleets that hoped the charge would remain negligible should now factor increasing costs into route planning, pricing, or electrification timetables.

What drivers and businesses should do right now to avoid surprises

If you drive in central London, the simplest step is to register for Auto Pay , it’s how you’ll secure the new discounts. Check your vehicle’s eligibility now, and look at how often you enter the zone to estimate annual costs under the new rates.

For small businesses and tradespeople, start modelling scenarios: keep older vehicles running, switch some to electric now, or stagger replacements. Remember to factor in running and charging costs, potential savings from lower fuel and maintenance, and grant schemes or salary-sacrifice options that might make EVs cheaper overall.

Finally, keep an eye on local consultations and guidance pages from TfL. The changes were announced after consultations and there may be clarifications, appeals or targeted support for particular user groups.

Where this fits in the wider trend , and how it compares to other cities

London’s move is not unique. Cities across Europe are rethinking congestion pricing and EV incentives as electrification grows. Some maintain full exemptions for zero-emission vehicles longer, while others reduce benefits to temper traffic or raise revenue. The big difference in London is scale: such a large and visible transition in the Congestion Charging Zone makes any tweak feel consequential.

For drivers, that means watching both the price and the practicalities. In cities where exemptions lasted longer, EV adoption was faster but congestion and parking demand rose sooner. In London, the compromise is designed to keep encouraging cleaner vehicles without losing the congestion charge’s deterrent power.

If you’re comparing options and thinking about when to electrify, look beyond the headline discount. Consider home and workplace charging availability, whole-life costs, and how often you actually drive into the zone.

Closing line

Ready to plan for the new charges? Register for Auto Pay, check your vehicle’s status, and see current prices so you’re not caught out when the new discounts kick in.