The new government Electric Car Grant: All you need to know

Incentives to help towards buying a new electric car are back, with up to £3,750 off the latest models priced under £37,000.

This guide will give you all the information you need to know to help understand what funding is available and which new EVs might be covered.

The Government announced the Electric Car Grant (ECG) on the 14th of July and it was launched in new car showrooms two days later.

The purpose of the grant, which is backed with a budget of £650 million over the next three years, is to further lower the upfront cost for more people to switch to zero emission vehicles and help towards wider air quality and carbon reduction goals for the UK.

In practice it's taken a bit more time for the scheme to get up and running, but the first models are now available to order, with over 15 models already approved to receive the discount.

How does the new electric car grant work?

The Electric Car Grant discounts are applied automatically at the point of sale, so there's no application or paperwork needed from customers to gain the discount on their new EV.

Car brands and dealerships apply for the discount through a dedicated portal, but this isn't something customers need to worry about.

There's a two tiered system in play, with the highest grant available for zero-emission cars with the lowest carbon emission scores with a £3,750 discount. The second tier of the grant offers a £1,500 discount.

Every EV has to have at least 100 miles of range to qualify.

The ECG has been capped at cars costing up to £37,000 "to target support at the most affordable options". The good news is that there are still plenty of models that qualify across a range of segments.

More models are likely to be added in the coming weeks and months as other car brands get to grips with the specific requirements needed to qualify.

These requirements include holding a verified science-based target, as well as meeting carbon emission requirements related to vehicle assembly and battery production.

This has called into question whether all manufacturers will be able to qualify for the grant if their production practices are not deemed sustainable enough (although, as detailed below, many brands have launched their own discount incentives anyway).

Which car manufacturers have eligible vehicles?

At the time of writing this guide, the following manufacturers qualify for the grant: Citroen, DS, Ford, Mini, Nissan, Peugeot, Renault, Skoda, Vauxhall and Volkswagen.

The following models have been officially announced to be cleared for Electric Car Grant funding:

Band 1 cars:

Band 2 cars

Will the new grant affect the used car market?

There have been some worries within the industry that discounting new EVs will put pressure on the used electric cars, particularly for nearly new EVs.

There have also been calls for more support for the used EV market overall, with some industry commentators believing that motorists with smaller budgets would benefit from more financial incentives.

Philip Nothard, insight director at Cox Automotive (the company that own used car auction company Manheim) and chairman of the Vehicle Remarketing Association, said discounts on new EVs have already dampened demand for nearly new models available in the used car market.

He said: "While driving down the cost of new vehicles will undoubtedly increase the EV adoption in the new market, these incentives fail to recognise the impact they will have on the used market.

"Residual values for cars up to two years old are now at a greater risk of further depreciation if adequate support is not extended to used vehicles."

However, Ian Plummer, a senior director at online used car website giants Auto Trader, had a more positive take.

He recently said it's unlikely the Electric Car Grant will either heavily or immediately impact used EV pricing and residual values.

Plummer said: "It was encouraging to see a strong surge of interest in new EVs on Auto Trader immediately post the grant launch and some of this positivity also flowed into used EVs, as we know the majority of those considering electric will shop both new and used cars."

Which brands are offering their own grants?

A lot of car brands have already launched their own marketing and discount incentives for EVs in the UK, separate to the grant.

This is either because they haven't been approved yet for the Electric Car Grant, or they're unsure if they will, so they're matching or offering enhanced incentives to customers to jump on the attention the grant funding has created.

Some car brands have also said that growing uncertainty around which models would be covered by the ECG was holding back new EV orders.

As a result, brands like Leapmotor, GWM UK and MG were some of the first brands to launch their own discount offers for electric cars.

It's worth checking online with each brand where they stand with discounts, as it's likely every brand will be offering incentives to remain competitive with other brands, whether they have qualified for the Electric Car Grant or not.

More electric car incentives are now available

Leapmotor

The new ‘Leap-Grant’ initiative provides immediate discounts across the brand’s UK lineup with the Leapmotor C10 family SUV receiving the full £3,750 grant, bringing its on-the-road (OTR) price down to £32,750.

The compact T03 city car is now priced at £14,495 OTR following a £1,500 discount – making it what Leapmotor claims to be the most affordable five-door EV currently available in the UK. Both models also come with 0% APR finance.

GWM UK

GWM UK is offering the £3,750 saving to customers immediately, matching the Government grant.

The discount is available across the Ora 03 range, including Pure, Pro and GT trim levels, taking the starting price down to £21,245.

The £3,750 saving can also be used towards a personal contract purchase (PCP) deposit and GWM UK is currently offering 0% APR PCP finance.

MG

MG Motor UK is offering a £1,500 reduction on its MG4 and MGS5 electric vehicles. In addition to the EV discount, MG is offering a further £1,000 discount for customers that take a test drive and then go on to buy, taking the total incenctive to £2,500.

Alfa Romeo

A £1,500 discount is now available on all Junior Elettrica models on top of all existing retail offers and 0% finance.

The new discount puts the entry price of the Junior Elettrica down to £32,405.

BYD

BYD is taking a slightly different approach by offering five-year free servicing across selected new and Approved Used models.

BYD's free servicing offer is available immediately on new Dolphin Surf, Dolphin snd Atto 3 models, as well as on any Approved Used BYD model purchased through its retail network.

It includes scheduled maintenance and labour for up to five years, based on BYD’s two-year/12,420-mile service intervals.

In addition to the free servicing offer, BYD is increasing its power battery warranty to eight years or 155,342 miles (200,000km), with a minimum 70% state of health (SOH) guarantee. The enhanced warranty applies across its entire EV and DM-i (Dual Mode-intelligence) range – including vehicles already on UK roads.

Hyundai

Hyundai is offering £3,750 off the Inster and £1,500 off of its other EVs, including the Kona Electric, Ioniq 5, Ioniq 6, Ioniq 5 N and Ioniq 9. Customers can also receive the benefit of an additional £500 off the Inster and Kona Electric as part of Hyundai’s Electrifying Summer Event, which runs until 31st of August.

Smart

Smart UK has introduced its own ‘Smart EV Car Grant’, offering an extra £1,500 on top of existing offers.

This brings the total saving to £3,500 on the Smart #1 and £2,500 on the Smart #3.

Skywell

Skywell has a temporary £3,750 incentive for retail buyers of its BE11 SUV until the end of September 2025.

The brand’s parent company, Skyworth Group, confirmed the support while it works through the Government’s approval process for the Electric Car Grant.

With an additional £6,000 finance deposit contribution already in place, the BE11 Standard Range now starts from £27,245.

Volvo

Volvo Car UK is offering a £1,500 incentive across its EX30 range, while it also waits for the approval process for the Electric Car Grant.

The incentive is in addition to its 0% PCP car finance offer.

Volkswagen, Seat, Skoda

Some Volkswagen Group brands have all guaranteed a £1,500 discount on selected models until August 31. The time limit shows VW Group has confidence that its models will eventually qualify for the Electric Car Grant, but this temporary discount steps in to provide certainty to customers.

Models covered by VW Group's discount include the Volkswagen the ID.3 and ID.4, the Cupra Born V1, V2 and V3, as well as the Skoda Elroq and Enyaq SUV (the Enyaq Coupé is excluded).

UPDATE: Eight Volkswagen ID.3 variants, including Pure Essential, Pro and Pro S versions, are eligible for the £1,500 discount, reducing the entry price of the range to £29,360. VW said eligibility for further ID. models are due to be confirmed by the Government soon.

Cupra’s Born V1, V2 and V3, across both 59kWh and 79kWh batteries now qualify for £1,500 in ECG grant funding. In addition, Cupra has launched a summer drive event running until September 30, offering £1,000 savings across its range and enhanced EV incentives.

Suzuki

Suzuki is offering the full £3,750 discount across the five-model e Vitara range. Suzuki has confirmed it will be running the offer until December 31, 2025.

How does the new electric car grant affect other schemes like salary sacrifice?

The new electric car grants can be used in addition to salary sacrifice schemes for electric cars, boosting savings even further.

Experts at The Electric Car Scheme, said the higher £3,750 grant spread over a typical three-year lease reduces monthly costs by approximately £104, when applied to a car valued under £37,000.

Basic rate taxpayers using salary sacrifice can save around £75 a month, while higher rate taxpayers using salary sacrifice would save an additional £60 each month.

Example Calculation: A £35,000 electric car eligible for the full £3,750 grant through salary sacrifice could see:

• Monthly lease cost reduction: £104 (from the grant)

• Additional tax savings: £75 per month (basic rate taxpayer)

• Total monthly benefit: £179 from the grant alone

This represents an annual saving of £2,148 just from the grant, on top of the existing 20-50% savings from a salary sacrifice car scheme.

What other grant schemes are available for EV drivers?

Electric van drivers can still get some financial assistance with the plug-in van grant, which has now been extended until March 31, 2026.

Van drivers can get up to £2,500 when buying small vans weighing up to 2.5 tonnes and up to £5,000 for larger vans weighing up to 4.25 tonnes.

There is a separate Wheelchair Accessible Vehicle (WAV) grant now running that is available for cars which are converted to WAVs and have a recommended retail price below £50,000.

The Government is also targeting other grant funding at helping landlords and those that rent get access to an EV charger where they live (Please note, we do not process this grant).

We've put together a full directory on the grants that are available to help with the cost of buying and running an EV here.