If you’re shopping for an electric car, then there’s up to £3750 of government funding to sweeten the deal – but it doesn’t apply to all models.
The UK is on course to phase out new petrol, diesel and hybrid cars by 2035, and it’s recently renewed the grant funding used to help make electric vehicles more affordable for drivers.
Financial support is nothing new. The original Plug-in Car Grant was introduced in 2011 to help bring down the cost of plug-in hybrid (PHEV), battery-electric (BEV) and hydrogen fuel cell (FCEV) cars. This had supported almost half a million purchases when it was withdrawn in June 2022.
The Electric Car Grant (ECG) picked up the baton in 2025. It’s focused on the cheaper end of the BEV spectrum and offers up to £3750 off the purchase price of selected electric cars. However, the criteria are a little more opaque than its predecessor.
Here’s what you need to know.
How do you claim the Electric Car Grant?
The scheme is operated by the Department for Transport’s Office for Zero Emission Vehicles (OZEV), and it’s designed to be as simple as possible for end-users.
If you’re buying a new EV, then the dealer (or manufacturer) applies for the grant on your behalf and deducts it from the purchase price, so there’s no additional paperwork to worry about.
Funding is also available to businesses, including leasing companies. That means fleets that lease their company cars get the funding baked into their monthly rentals.
Those savings also benefit drivers on salary sacrifice schemes, as they’re effectively leasing a car through their employer, so they also get cheaper monthlies and potentially more cars to choose from.
However, it doesn’t affect the list price (P11D) for company car drivers, so it won’t make an impact on your benefit-in-kind (BIK) tax bills.
Given that EVs fall into the lowest BIK tax band of 4%, the grant would barely make a difference anyway.
OZEV has committed £2 billion of funding with an end date of 2028/29, but it has said that it can withdraw the scheme at any time.
Which EVs are eligible and why?
To qualify for the grant, manufacturers are asked to submit a body of evidence to OZEV demonstrating that their cars meet specific criteria.
