UK Unveils New Electric Car Grant Offering Up to £3,750 Off Zero-Emission Vehicles

Three years after ending the Plug-In Car Grant, the UK Government is making a fresh push to accelerate electric vehicle adoption. This time, it's introducing a new Electric Car Grant aimed at helping drivers with the upfront cost of buying a new EV. Under the scheme, motorists can get up to £3,750 off the purchase price of a brand-new, zero-emission car.

The size of the grant depends on the vehicle's sustainability. Cars that fall into band one, the most environmentally friendly, qualify for the full £3,750. Those in band two can receive up to £1,500.

Unlike previous schemes, drivers won’t have to do any extra paperwork. The funding will be distributed directly to manufacturers, who must ensure their vehicles meet the criteria set by the Government’s Zero Emission Vehicle (ZEV) mandate. If a car qualifies, the discount will automatically be applied at the point of sale.

To be eligible, the vehicle must cost £37,000 or less. The total funding pool for the scheme is £650 million, and it will be distributed to manufacturers on a first-come, first-served basis.

Once manufacturers get approval for their eligible EVs, buyers can start receiving the discount immediately. Funding will be available until the 2028/29 financial year. Applications for manufacturers opened on Wednesday, July 16.

Electric car registrations in the UK were up by nearly 26 percent year-on-year in May. Despite that growth, the shift toward EVs has been more substantial among fleets than among individual consumers. Private buyers have been slower to adopt, in part due to cost concerns.

Electric Vehicles UK’s CEO, Dan Caesar, said: “A generous grant of this nature gives a new group of interested buyers, that might have thought that going electric was beyond them, a gentle nudge into what is great tech. More than nine out of 10 battery EV drivers will never revert, and there’s a reason for that.”

Ceasar said that, given the decrease in EV running costs in recent years, upfront costs and motorists’ “misconceptions” are now “the primary reason for hesitance”.

ChargeUK’s CEO Vicky Read said the news is “brilliant” and urged motorists not to fret about charging point availability.

Read said: “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.”

Last month, the Society of Motor Manufacturers and Traders cautioned the Government that relying on manufacturers to keep slashing EV prices wasn’t a sustainable strategy. In response, the Government not only launched this new grant but also committed £63 million to boost the country’s EV charging infrastructure. That funding includes grants for installing chargers at homes, workplaces, and NHS England facilities, steps aimed at making EV ownership more accessible and practical for everyone.