Electric cars grant: Who will qualify for the £3,750 discount?

ITV News

15-07-2025

Grants for new electric cars are being reintroduced after being scrapped in 2022, the Department for Transport (DfT) has announced.
Drivers will now be able to reduce the cost of purchasing a new electric vehicle by up to £3,750.
Who will qualify for the government grant?
The scheme is available for anyone who wants to buy a new electric car, but it's restricted to vehicles priced at up to £37,000.
Amounts will be based on a car's sustainability criteria. The greenest vehicles will be in band one, which means a grant of up to £3,750. Band two vehicles will receive up to £1,500.
Officials hope the measure will encourage more drivers to switch to electric motoring.
Currently, drivers buying electric cars can benefit from tax breaks if their employer has a company car scheme, but there have been no universally available grants since they were axed by the Conservative government in June 2022.
When does the new scheme come into place?
Car manufacturers will be able to apply for the money through the Electric Car Grant from Wednesday.
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.
"With over 82,000 public charge points now available across the UK, we've built the infrastructure families need to make the switch with confidence.'
The grants will be funded through a new £650 million scheme.
RAC head of policy Simon Williams said discounted cars should start appearing at dealerships 'within weeks'.
He added: '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.'
What changes have been made to charging electric vehicles?
The DfT announced last week that road signs for electric vehicle charging hubs will be introduced on major A roads in England.
It also launched a £25 million scheme for local authorities to support residents without off-road parking to recharge electric cars using cables connected to their homes, embedded in pavements.
How will the new grant affect car sales?
Under the government's zero-emission vehicle (Zev) mandate, at least 28% of new cars sold by each manufacturer in the UK this year must be zero-emission, which generally means pure electric. The figure across all manufacturers for this in the first half of the year was 21.6%.
Changes to the Zev mandate mean it will be easier for manufacturers who do not meet the targets to avoid fines.
Prime Minister Sir Keir Starmer announced in April that sales of new hybrids that cannot be plugged in will be permitted to continue until 2035.
What has been the reaction to this announcement?
Conservative shadow transport secretary Gareth Bacon accused the government of 'forcing families into more expensive electric vehicles before the country is ready', adding the reintroduction of grants would mean 'more pain for taxpayers'.
He said: 'Last year, only one in 10 private purchases of new cars was electric. This is a product people demonstrably do not want.
"Last week, the Office for Budget Responsibility made clear the transition to EVs comes at a cost, and this scheme only adds to it. Make no mistake: more tax rises are coming in the autumn.'
The Conservative Environment Network also described the grants as 'a waste of taxpayers' money', given declining prices for electric vehicles, but urged the government to invest in charging infrastructure instead, 'giving confidence to a new generation of drivers to go electric'.