The Electric Car Grant: A Complete Guide
Everything you need to know about the recently announced Electric Car Grant, ahead of discounts for private buyers being applied to eligible EV models in the upcoming weeks.
Last updated: Jul 25, 2025 • 4 min read
Summary
The UK Government’s Department for Transport (DfT) has announced a new £650 million grant scheme to reduce the purchase price of certain electric vehicles as part of their wider efforts to support the EV transition across the country. Under the scheme, discounts of up to £3,750 will be available to UK drivers on new electric cars with a list price of under £37,000 to significantly reduce the costs of switching or upgrading to an EV.
What is the Electric Car Grant?
Announced on 16th July 2025, the new grant applies a discount to the purchase price of certain electric vehicles, with the size of the discount (either £3,750 or £1,500) being determined by sustainability criteria set by the DfT.
How does the Electric Car Grant work?
In order for drivers to benefit from the available discounts, electric car manufacturers must first successfully apply for the grant, which is then applied to the purchase price that they can then offer to customers. In other words, unlike other grants, drivers don’t need to do anything to apply. To be successful, the vehicle must meet some technical standards, including:
- A list price of less than £37,000
- Be a new car with no previous ownership, or be pre-registered
- Producing zero tailpipe emissions (0g CO2/km)
- A minimum WLTP range of 100 miles
- A minimum vehicle warranty of 3 years or 60,000 miles, whichever is reached first
- A minimum battery and drivetrain warranty of 8 years or 100,000 miles
In addition, the manufacturer must also hold a Science Based Target (SBT), which is essentially a commitment to reduce emissions or achieve net-zero in line with the latest climate science research.
Without a valid SBT, the manufacturer can’t apply any vehicle for eligibility, even if meets all the other criteria. In the case of companies with split ownership, the joint-owners will both have to hold valid SBTs.
Which EVs are eligible for the Electric Car Grant?
Any electric car that meets the requirements above can be eligible for the discount, with eligibility assessed by the DfT and the Vehicle Certification Agency (VCA).
Regarding the list price, this doesn’t include optional extras or different trim levels of a car. For example, an EV that costs more than £37,000 may be eligible if a model with the same combination of battery and motor, but with a different trim, has a list price below £37,000.
Additionally, if an EV is approved as eligible and a new variant is released in the future, that new car isn’t automatically deemed as eligible, and the manufacturer will need to apply for that particular variant to be approved under the scheme.
However, for an EV to be eligible the manufacturer must submit an application and be approved. This means no cars are currently eligible at this stage. We’ll keep you informed as the first electric cars start to be approved under the scheme.
How long will the Electric Car Grant last?
A total of £650 million has been ring-fenced for the scheme, which is set to be available until 31st March 2029 unless the funding for the scheme is used up. However, the government has said that the scheme can be amended without notice, which could include how long it’s available for.
When will approved EVs be discounted for drivers?
This all depends on how long it takes for manufacturers to submit their application, and how long it takes for their electric vehicle(s) to be approved.
However, once a car has been deemed eligible, it should be quick for the discount to be available for the driver, as there isn’t anything drivers have to do to apply for it. Instead, the discount will be taken off the vehicle’s purchase price as it’s sold by the dealership.
Our thoughts on the Electric Car Grant
Like many in the EV industry, we welcome the new grant as a means of encouraging electric car ownership levels across the UK by reducing costs for households who want to make the switch. It’s a positive step from the UK government in supporting the country’s EV transition, where high upfront costs have prevented drivers from making the switch in the past.
CEO of Pod, Melanie Lane, said: "We’re really pleased to see this new incentive to help drivers manage the cost of switching to an EV. We know that living with an EV makes good sense for the wallet as well as the planet, but we need to continue innovating and incentivising the switch to ensure the electric low carbon ecosystem of the future is both robust and investable."