New electric car grant
The new Electric Car Grant launched in July 2025 offers up to £3,750 off eligible electric vehicles (EV) under £37,000, which when combined with salary sacrifice schemes can reduce total EV costs by over 50% for UK drivers.
The £650 million grant will significantly decrease electric car prices as manufacturers can apply through the Electric Car Grant. Drivers will benefit from discounts as soon as manufacturers successfully apply for their zero emission cars to be part of the grant scheme, starting from 16 July 2025.
The grants operate through a two-tier system based on manufacturer sustainability standards:
- Band One: £3,750 for the most sustainably produced cars
- Band Two: £1,500 for other qualifying electric vehicles
Vehicle requirements:
- Pure electric vehicles with zero emissions
- List price of £37,000 or under
- Minimum 100-mile range and 8-year battery warranty.
The funding is available until the 2028/2029 financial year, however, it could close early if funds are exhausted, so drivers should act promptly to secure eligibility.
The New Electric Car Grant is automatically applied to the cost of eligible vehicles without the need to apply for funding, making EVs cheaper to buy/lease.