A new grant scheme which will mean discounts of up to £3,750 on new EVs has been announced by the UK Government.
The new Electric Car Grant, which is backed by £650 million of funding, will be applied at the point of sale, with EVs priced at or below £37,000 potentially eligible.
Manufacturers will need to apply for their vehicles to be included in the scheme, with applications opening on 16 July.
Funding, which will be allocated on a first-come, first-served basis, is available until the 2028/29 financial year – although the government says the scheme could be subject to early closure should the funding be exhausted before then.
The government says available grant amounts are based on sustainability criteria, with the greenest EVs receiving up to £3,750 and others receiving up to £1,500.
It says for manufacturers to be eligible, they must have committed to a verified Science-Based Target (SBT) and have achieved carbon scores below a certain threshold.
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.
“And with over 82,000 public chargepoints now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”
Grants towards new electric car purchases were previously available under the plug-in vehicle grant scheme, before eligibility for this ended in 2022. Grants have remained available under this scheme for vans, trucks, motorcycles, wheelchair accessible vehicles, and taxis.
Reacting to the new announcement, BVRLA chief executive Toby Poston said: “Bit by bit, the government is chipping away at the barriers to EV adoption. Targeted incentives have powered the transition to date and now the government is acting to widen the demand base for new electric cars by providing this grant.
“This generous grant will boost uptake in the retail market but could have serious repercussions for the used market, where rampant depreciation already has red warning lights flashing.
“Further stimulating new EV registrations without supporting the used market risks creating an even greater supply/demand imbalance, putting even more pressure on fast deflating second-hand values. The resulting losses will erode confidence and result in higher finance costs for new EVs, eliminating much of the benefit from the original grant.”
AA president Edmund King said: “We welcome this positive move to help boost the uptake of EVs. A grant of up to £3,750 is to be celebrated and we urge drivers to take full advantage of this offer.
“The AA’s Motoring Manifesto and EV Viewpoint were clear that drivers are merely hesitant about the move to EV’s, with price being a barrier to ownership. We have campaigned for incentives to help overcome this issue, and are pleased our calls have been heard.
“Alongside the £63 million investment package to help sign the way to charging hubs on motorways and major A-roads, as well as helping fund drivers with no dedicated off-street parking to install pavement gullies so they can charge from home, this is a supercharged effort to accelerate the electric revolution.”
RAC head of policy Simon Williams said: “Within weeks, discounted cars should start appearing at dealerships across the country. And, 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.
“This is further welcome news following last week’s announcement about more funding for pavement gully charging solutions that will enable those without driveways to charge an EV at home. Together, these initiatives should mean more drivers than ever start benefitting from the lower costs of running an electric car.”
