Government announces return of grants worth up to £3,750 to support EV uptake
Wed 16 July 2025
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The Government has announced a £650m grant scheme which will mean grants to buyers of new electric vehicles worth up to £3,750 per car. Grants will be limited to the purchase of cars below a price (RRP) of £37,000 or less and there will be two levels, depending on the manufacturer's sustainability standards.
The vehicles made in facilities showing the highest sustainability standards (band one) will receive up to £3,750, with band two vehicles receiving up to £1,500.
To be eligible to offer the electric car grant manufacturers will be required to have committed to a verified science-based target and have embodied carbon scores below a defined threshold. According to Fleet News, the Government has already suggested that Chinese-made EVs will struggle to qualify.
Models sold by European brands that are produced in China, or have EV batteries made there, are less likely to get the grant or may only receive a discount of £1,500, according to What Car?
Eligibility is also dependent on the size of a vehicle's battery pack as well as on having the highest safety rating.
Due to the uncertainty and complexity of grant eligibility, there are concerns that there may be delays in confirming which vehicles will receive the grant. Fleet News reports the cancellation of orders for models below the £37,000 threshold as customers delay purchases pending confirmations of the grant. This has prompted some manufacturers - such as as Leapmotor, GWM and MG - to preemptively offer their own discounts.
The Government says that drivers will start to benefit from discounts as soon as manufacturers successfully apply for their zero emission cars to be part of the grant scheme from 16 July 2025, with funding available until the 2028 to 2029 financial year.
It says that "the discount means that zero emission cars are now cheaper to buy and run than ever before and comes on top of preferential tax rates, delivering real savings for working families".
The Government says that this latest investment is part of "the plan to support motorists, including a record £1.6 billion invested to tackle potholes and freezing the fuel duty at 5 pence until spring 2026, saving the average motorist £50 to £60 over the year".
Transport Secretary, Heidi Alexander, said: "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."
In total, the Government says it is investing £4.5 billion to: "turbocharge the switch to EVs, securing Britain’s position as a world-leader in electric vehicle adoption while helping put more money in people’s pockets. Today, the UK is already a global leader in the transition to zero emissions driving, with the largest EV market in Europe in 2024 and sales up a fifth on the previous year".
Dan Caesar, CEO, Electric Vehicles UK, said: "A targeted incentive program is a significant step forward in encouraging consumers to buy battery electric vehicles and to make them more accessible. While battery-only EVs are much cheaper to buy and run than most realise, surveys show that cost misperceptions are the primary reason for hesitance."
Mike Hawes, SMMT chief executive, said: "Today’s announcement of the return of government support for the purchase of electric vehicles is a clear signal to consumers that now is the time to switch.
"Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just 1 in 4 today, to 4 in 5 by the end of the decade.
"This announcement is a welcome response to consistent calls from the industry for more support, which will be in addition to the substantive subsidies already provided by manufacturers. Taken with recent announcements regarding infrastructure investments and the Industrial Strategy, the UK has the opportunity to maintain its position as a leader in both the manufacture and sale of zero emission vehicles."
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