- Electric Car Grant will offer £3,750 towards the purchase of a new EV
- Fund to be worth £650m and will be available until 2029
- Industry experts have welcomed the announcement
The government will offer drivers £3,750 towards buying an electric vehicle (EV) as part of a new grant scheme which it says will make zero-emission driving a reality for thousands of working people.
The £650m Electric Car Grant (ECG) will offer discounts of £3,750 at the point of sale for new eligible electric cars priced at or under £37,000. It will be part of the government’s manifesto commitment to phase out new petrol and diesel vehicles.
Funding will be available from 16 July 2025 and will run until the 2028-2029 financial year. The ECG will “narrow the upfront cost” between petrol and EVs and give “thousands more drivers” access to savings of up to £1,500 a year in fuel and running costs compared to a petrol car.
Car manufacturers will be able to apply for the ECG, with eligibility dependent on what the government called the “highest manufacturing sustainability standards”.
Transport secretary Heidi Alexander said the grant will help the UK’s automotive sector “seize one of the biggest opportunities of the 21st century”.
“With over 82,000 public charge points now available in the UK, we’ve built the infrastructure families need to make the switch with confidence,” Alexander said.
The ECG builds on the government’s other £63m package to support at-home charging for households without driveways and create thousands of charge points at business depots across the country.
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Reacting to the news, Simon Williams, head of policy, RAC, predicted that discounted EVs could start appearing at dealerships “within weeks”.
Williams said that combined with the previous £63m plan, the ECG will allow “more drivers than ever before will benefit from the lower costs of running an electric car”.
Dan Caesar, CEO, Electric Vehicles UK, described the ECG as a “significant step in encouraging consumers” to buy EVs, stating that “misperceptions” are a big problem.
“A generous grant of this nature gives a new group of interested buyers, who might have thought that going electric was beyond them, a gentle nudge into what is great tech,” Caesar said. “More than nine out of 10 battery EV drivers will never revert, and there’s a reason for that.”
Mike Hawes, chief executive, Society of Motor Manufacturers and Traders (SMMT) said this latest government support is the sign that “now is the time to switch” to an EV.
“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,” Hawes said.
“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”.
