Vehicle Incentives
All Tesla vehicles have zero emissions whilst driving and may be eligible for financial incentives that encourage clean energy use in the UK.
Request a callback from an advisor to learn about incentives.
London Congestion Charge
The London Congestion Charge is a daily charge for driving a vehicle within the charging zone in central London. The charge is applied between 07:00 and 22:00, seven days per week. The daily charge is £15 for an indefinite period. Currently all Tesla vehicles qualify for the 100 percent cleaner vehicle discount.
London Ultra Low Emission Zones
Tesla vehicles can drive within London's Ultra Low Emission Zone, which covers all London boroughs, without paying the £12.50 charge. The cost of paying the ULEZ over three years could be up to £13,650 when driving into the zone on a daily basis in a petrol or diesel vehicle.
Clean Air Zones
Non-compliant vehicles driving through Clean Air Zones across the UK are required to pay a daily charge of £10-£15. With zero emissions whilst driving, all Tesla vehicles are exempt from this charge. Check with your local council for further information.
Vehicle Excise Duty
From April 2025, all electric vehicles are subject to Vehicle Excise Duty (often referred to as 'road tax').
If you own an electric vehicle priced below £40,000, you will pay £10 road tax in the first year of ownership. From the second year onwards, you will pay the standard rate of £195 per year.
Owners of Model 3 Rear Wheel Drive vehicles starting at £39,990 will pay £10 road tax in the first year and £195 per year from the second year.
If you own an electric vehicle priced over £40,000, you will also have to pay the Expensive Car Supplement of £425 per year. This means your total yearly road tax will be £605 from the second year of ownership.
Check the government website to see how your vehicle may be affected.
Learn More: Vehicle tax rates, Vehicle Excise Duty Rates, Contract Hire Vehicle Excise Duty
Company Car Tax (Benefit in Kind)
Benefit in Kind (BiK) is a tax on employees who receive benefits on top of their salary. If you have a company vehicle for private use, you will have to pay a BiK contribution, or a company car tax. New and existing Tesla vehicles are eligible for a 2 percent BiK rate for the 2025/2026 tax year. The BiK rate will be held at 2 percent until 2028/2029 tax year, after which it will gradually increase. The average petrol or diesel vehicle has a BiK rate of 20 to 37 percent.
This means employees leasing electric company vehicles through the salary sacrifice scheme will pay less income tax (as the amount is deducted from their gross salaries) and significantly less BiK than those leasing petrol or diesel vehicles.
Learn More: Benefit in Kind, Company Car Tax Rules, 2024 Autumn Budget
100% First Year Allowance (FYA)
First Year Allowance is claimable for up to 100 percent of the cost of qualifying low emission and electric vehicles. By choosing a Tesla vehicle, your business can claim a 100 percent year one deduction for the cost of the vehicle.
The First Year Allowance is applicable to new vehicles and vehicles considered new despite previously being used, such as vehicles registered as a sales or service demonstrator by the manufacturer.
In the March 2020 UK Budget, the Government announced that 100 percent FYA for businesses purchasing low emission vehicles will be extended until 31 March 2026.
Learn More: HMRC Capital Allowance Manual, Capital Allowances
Car Fuel Benefit Charge
As electricity is not classed as a road fuel, Tesla vehicles have no fuel benefit charge. That means employees are exempt from paying Benefit in Kind on electricity provided by their employer to charge an electric company vehicle.
Advisory Fuel Rates
As electricity is not classed as a road fuel, the car fuel benefit charge does not apply to electric charging. If an employee uses a company vehicle, no Benefit in Kind occurs when charging their vehicle at the workplace.
The advisory fuel rate for fully electric vehicles has been confirmed by HMRC as 9 pence per mile.
Class 1A National Insurance Contributions
Class 1A NICs based on the vehicle's P11D value and relevant BiK rate are applicable as determined by the official carbon emissions and fuel type.
Salary Sacrifice
Salary Sacrifice enables employees to sacrifice some of their gross salary in order to receive the benefit of driving a fully electric company vehicle. As the sacrifice is executed before tax and National Insurance contributions are applied, employees effectively save costs in the acquisition of their new vehicle in a similar way that other savings such as childcare, gym membership or cycle-to-work schemes operate.
From a company’s perspective, this scheme provides an opportunity for organisations to offer employees a new vehicle at a lower cost than they could achieve in the retail market in a tax-efficient way. The company may also benefit from reduced National Insurance contribution payments from the scheme.
Salary Sacrifice is either offered by the employer or the leasing provider.
You can get 75 percent off the cost to purchase and install a Wall Connector, up to a maximum of £350 until 31 March 2026.
Learn More: For renters and flat owners, For households with on-street parking
Incentive programmes are offered and administered by government agencies. Eligibility and availability vary and are outside of Tesla’s control.