Electric freight and the November 2025 Budget: What logisticians need to know

The UK’s November 2025 Budget signals continued ambition to accelerate low-emission transport, but its measures create a mixed outlook for electric heavy goods vehicle (eHGV) adoption. For supply chain leaders, the implications are significant both financially and operationally requiring careful planning to balance short-term incentives with long-term cost pressures.

Short-term incentives remain strong

The Plug-in Truck Grant continues through 2026, offering up to £25,000 per qualifying vehicle. Extended capital allowances for zero-emission vehicles enable accelerated tax relief, improving cash flow and reducing upfront costs. For operators with predictable routes or urban networks, these measures make early adoption compelling.

Infrastructure investment is a positive step

A £200 million allocation for high-capacity charging points at motorway services and logistics hubs addresses range anxiety and charging availability. Grants for depot electrification will support readiness but planning permissions and grid capacity remain critical challenges. Proactive engagement with energy providers and property developers is essential to avoid bottlenecks.

Fiscal uncertainty clouds the long-term picture

While eHGVs over 3,500 kg remain exempt from the new pay-per-mile road tax announced for cars and vans, concerns persist about future taxation once electric haulage becomes mainstream. This uncertainty could narrow the cost advantage of electric over alternatives such as biofuels, influencing fleet strategies beyond 2028. Similar rhetoric can be seen in London’s congestion charge which ends its long standing 100% Cleaner Vehicle Discount in a two-step reduction which will increase costs for operating eHGV’s in central London. From 2026, a 50% discount will apply to each HGV, per day in London reducing further to 25% in 2030. This creates an additional maximum charge of £10.50 for 2026 and £15.75 per eHGV, per day to consider.

Operational economics still favour electric in the near term

Lower fuel and maintenance costs, combined with grants and tax relief, make eHGVs attractive for urban and regional distribution. Infrastructure commitments will further support adoption, helping businesses meet sustainability targets and respond to growing customer expectations for low-carbon delivery.

Europe sets a higher bar

Germany offers toll exemptions until 2030 and subsidies of up to €40,000 per vehicle nearly 40% more than UK equivalents. France provides tax credits and reduced registration fees, with no plans for eHGV taxation. Nordic countries maintain strong incentives and infrastructure grants. These policies create competitive advantages for operators in those markets and highlight a risk for UK businesses engaged in cross-border logistics preferring to serve the international markets.

Strategic implications for supply chain leaders:

• Secure infrastructure partnerships to guarantee charging capacity and avoid operational disruption.

• Review your electric haulage strategy for the benefits of adopting early and taking advantage of current government support packages.

• Explore collaborative models such as shared charging hubs or joint procurement to spread costs and accelerate adoption.

In summary:

The November Budget provides a strong short-term platform for electric freight but leaves long-term uncertainty that could slow momentum beyond 2028. Leaders who invest early in infrastructure, technology, and partnerships will be best positioned to manage costs, meet sustainability commitments, and maintain resilience in a market moving rapidly toward decarbonisation.