Electric Car Grant - what do you need to know?

The UK government has launched a new incentive for electric vehicle (EV) buyers: the Electric Car Grant, offering up to £3,750 off the purchase of selected new electric cars priced under £37,000.

Announced in July 2025, this policy aims to make EVs more affordable for UK households while supporting cleaner, greener car production.

How does the grant work?

If you’re considering buying an EV, the new grant could significantly reduce the upfront cost. There are two different tiers to the grant:

• £3,750 off: Available for new EVs produced by manufacturers with the lowest verified production emissions and strong sustainability credentials.
• £1,500 off: Applies to other qualifying electric vehicles under £37,000, provided they still meet the government’s minimum criteria for emissions and sustainability.

Unlike previous schemes, the discount is applied instantly at the dealership when you make your purchase – there’s no need to fill out extra forms or wait for reimbursement. Car makers can already start applying for approval and buyers can see price reductions as soon as new models are confirmed by the Department for Transport.

Which EVs and manufacturers qualify?

Eligibility is strictly linked to the car’s price and environmental impact:

• Vehicle must be brand new, with no previous owners.
• EVs must be priced below £37,000 (excluding optional extras).
• Each model must offer a minimum range of 100 miles and come with three-year/ 60,000-mile warranty and 8-year/ 100,000-mile battery warranty.
• Most crucially, qualifying manufacturers must have a validated Science Based Target (SBT) for emissions reduction.

Which EVs are exempt from the new grant?

Not every EV or manufacturer will qualify for the grant and the final list is still evolving. Some EV manufacturers have already announced which cars will receive the grant, while others are offering discounts to match the grant anyway.

The problem is that eligibility isn’t solely about low vehicle emissions – it’s equally focused on sustainability across the entire production chain, from factories to batteries. Eligibility can even differ between different versions of the same car within the range.

If a version in a car’s range is below the £37,000 price bracket, then all of the other versions with the same battery get the discount, even if they’re priced above £37,000 because they have a higher specification – though a price limit has now been introduced of £42,000. But the same model of EV with a larger battery and a starting price of above £37,000 wouldn’t get the grant at all, despite potentially being less than that £42,000.

Why introduce the new grant?

The government has allocated £650 million for this scheme, aiming to help subsidise up to 173,000 vehicles at the maximum grant – a substantial boost for the industry to help assist retail sales of EVs.

What are the next steps for buyers?

• Check eligibility: Confirm whether your chosen EV and its manufacturer are on the latest list published by the Department for Transport – see list here
• Visit dealerships: The grant is applied automatically, so you simply negotiate the price as usual and dealers will handle the paperwork.
• Act soon: The grant will run for three years or until funding is exhausted, so early adopters stand to benefit the most if demand is high.