The UK government has today unveiled a £650 million Electric Car Grant scheme, designed to reduce the upfront cost of new electric vehicles (EVs).

Its main aim is to accelerate the country’s shift to zero‑emission motoring ahead of the planned 2030 ban on new petrol and diesel car sales.

Go

From 16 July 2025, buyers of brand-new EVs priced at £37,000 or less will be eligible for a point-of-sale discount, depending on the environmental sustainability credentials of the vehicle.

The “greenest” models — manufactured under high sustainability standards — will secure up to £3,750 off their purchase price, while a second tier of still eco-friendly cars can claim up to £1,500.

Transport Secretary Heidi Alexander emphasised the scheme’s dual purpose: easing financial burdens on households and bolstering the UK automotive sector.

“This EV grant will not only allow people to keep more of their hard‑earned money – it’ll help our automotive sector seize one of the biggest opportunities of the 21st century… And with over 82,000 public chargepoints now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”

Restart

The grant marks the return of government support after a hiatus — the original scheme was discontinued in June 2022.

Only cars priced £37,000 or below qualify, excluding luxury EVs like Tesla, and eligibility hinges on a vehicle’s carbon footprint during production, particularly for battery manufacturing.

Alongside this, Chinese-manufactured EVs, often the cheapest on the market, are also excluded.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), described the initiative as a “clear signal to consumers that now is the time to switch,” reinforcing the auto industry’s demand for government-backed incentives .

Similarly, Simon Williams, RAC’s head of policy, anticipates that dealerships will introduce discounted EVs within weeks, with the most significant savings allocated to sustainable models.

Narrowing the gap

The UK’s average new electric car price now stands at around £49,000, compared to roughly £34,000 for petrol models — a premium of over £15,000.

By targeting vehicles under £37,000, the grant tackles one of the key barriers to adoption: initial cost.

Additionally, the scheme is part of a broader £4.5 billion “Plan for Change” investment, which includes a £63 million boost for public EV charging infrastructure, addressing range anxiety, and home charging support for households without driveways.

With more than 82,000 public chargepoints across the UK — and a new one installed roughly every half hour — charging infrastructure is improving rapidly.

Powering toward 2030

The grant supports the UK’s Zero Emission Vehicle (ZEV) Mandate, which requires at least 28% of new car sales in 2025 to be zero-emission, increasing to 50% in subsequent years.

Currently, EVs account for around 21–22% of new vehicle sales.

While the policy has drawn support from industry insiders, critics—such as opponents of previous subsidies—question whether public funds are being used efficiently.

However, backers argue the grant is essential to jumpstart consumer demand and make EVs accessible to a wider demographic.

What to know

  • Eligibility: New electric cars priced at or under £37,000 that meet government sustainability criteria.

  • Discount tier: Up to £3,750 for top‑band vehicles; up to £1,500 for the second band.

  • Availability: The grant will run through to the 2028–29 fiscal year.

  • Process: The grant is automatically deducted at the point of sale; manufacturers claim reimbursement from the Treasury.

This renewed commitment marks the government’s most significant EV affordability initiative in years.

By aligning consumer incentives with infrastructure expansion and sustainability goals, the Electric Car Grant aims to power the UK toward its net‑zero and 2030 targets.

The government believes it offers families real savings, industry momentum, and cleaner air for all.