- The Department for Transport confirmed this evening earlier rumours of the return of grants towards the purchase of new electric cars, after the original Plug-in Car Grant scheme was discontinued back in 2022.
- The new grant scheme, now officially called the Electric Car Grant (ECG) with £650 million of backing, will help make EV ownership even more accessible, as the ZEV mandate progresses towards 2030.
- The ECG will focus on making lower-priced EVs even more affordable, with discounts only available on new electric cars priced at or below £37,000.
The UK introduces the Electric Car Grant, making new EVs more affordable
Under the new scheme, from the 16th of July, manufacturers will be able to apply for their eligible electric cars to be part of the scheme, with funding for the scheme running until the 2028/29 financial year – just moments before the sales ban of new pure petrol and diesel cars comes into effect at the turn of 2030.
The eligibility criteria looks to be stricter than the previous Plug-in Car Grant, with eligibility for the discount being ‘dependent on the highest manufacturing sustainability standards’. There’s also no hard confirmation on the earlier rumour that EVs manufactured within the UK would be given a favourable discount, but the ‘up to £3,750’ wording suggests this could be the case.
With over 34 new EVs available under the £30,000 mark, and numerous more between the £30,000 and £37,000 mark, the grant will cover a significant proportion of the new electric cars on sale in the UK, potentially covering models such as the Renault 5, Vauxhall Corsa Electric, and Skoda Elroq. The UK’s best-selling EV, the Tesla Model Y, won’t be eligible for the discount however, owing to its £44,990 starting price.
With an increasing number of new electric models achieving price parity with their ICE siblings, this grant could help to make some electric models more affordable up front than their petrol and diesel-fuelled alternatives. Add in to that the significantly lower running costs of EVs, particularly for those able to charge at home, and it’s easy to see how this new grant could cause a much wider shift to electric amongst the early mainstream. The UK was already the largest EV market by units sold in Europe last year, and this new grant could help that remain the case in 2025.
How is the industry reacting?
Vicky Read, CEO of ChargeUK, commented:
“This announcement is brilliant news – for drivers and for the UK’s transition to electric vehicles.
With a commitment to invest £6bn through to 2030, the UK’s charging industry has rolled out infrastructure ahead of demand to ensure that when drivers switch the network is there to make charging as convenient as possible. There are now 82,000 public charge points and a new one goes in the ground every 29 minutes on average.
Hot on the heels of the weekend’s announcement on measures to support charging, including meeting ChargeUK’s calls for improvements to signage on main roads, todays package is another vital boost to the charging industry, helping it invest with confidence.”
Delvin Lane, CEO of InstaVolt, added:
“With one-in-four new car buyers purchasing an EV, the DFT’s ECG initiative could not come at a better time. Together with the Government’s other recent actions to support EV customer growth – including improved signage for charging hubs which will unlock opportunities for retailers hosting EV charging points and boost EV consumer confidence – the ECG will be a major contributor to help further grow EV customer demand as we transition to an all-electric future.”
Simon Williams, Head of Policy at the RAC, commented:
“Within weeks, discounted cars should start appearing at dealerships across the country. And, as the biggest savings will be given to cars with the strongest ‘green’ manufacturing credentials, drivers will be picking models that are not only better for their wallets, but better for the planet too.
This is further welcome news following last week’s announcement about more funding for pavement gully charging solutions that will enable those without driveways to charge an EV at home. Together, these initiatives should mean more drivers than ever start benefitting from the lower costs of running an electric car.”
