UK Government Reinstates EV Purchase Grants: Up to £3,750 Off Electric Cars in 2025
The UK government has brought back a popular scheme to make electric vehicles (EVs) more affordable. Announced on 14 July 2025, the EV purchase grants reinstated program offers discounts of up to £3,750 on new electric cars priced under £37,000. There’s also an extra £1,500 supplemental grant for the most sustainable, eco-friendly models. Backed by £650 million in funding, this initiative aims to boost EV adoption and support the UK’s net-zero goals. Here’s everything you need to know about the UK electric car grant 2025, including how it works, who benefits, and why it matters.
What Is the New EV Purchase Grant Scheme?
The Electric Car Grant (ECG) is designed to make EVs more accessible for UK drivers. Starting 16 July 2025, buyers can get discounts ranging from £1,500 to £3,750 at the point of sale for eligible EVs. The scheme focuses on vehicles priced at or below £37,000, ensuring affordability for working families. An additional £1,500 supplemental grant is available for models that meet strict sustainability standards, rewarding manufacturers who prioritize eco-friendly production.
The £650 million funding will support this scheme until the 2028/29 financial year. However, the government warns that funds could run out earlier, as grants are awarded on a first-come, first-served basis. This move comes as part of the government’s plan to phase out new petrol and diesel car sales by 2030, encouraging drivers to switch to cleaner vehicles.
Why Are EV Grants Back?
The UK previously offered EV grants from 2011 to 2022, with discounts up to £5,000 per vehicle. These were scrapped under the Conservative government, which shifted focus to expanding public charging infrastructure. However, with EV sales lagging—especially among private buyers—the new Labour government is reviving the electric vehicle subsidy UK to address upfront cost concerns.
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.” The scheme aims to close the price gap between EVs (averaging £49,790) and petrol cars (around £34,225), making electric driving more appealing.
How Does the £3,750 EV Discount Work?
Here’s how the £3,750 EV discount breaks down:
- Eligibility: The grant applies to new, zero-emission electric cars with a recommended retail price (RRP) of £37,000 or less. Luxury models, like Teslas or high-end electric Range Rovers, won’t qualify to ensure taxpayer money supports affordable options.
- Grant Tiers: Discounts range from £1,500 to £3,750, depending on the vehicle’s sustainability score. The “greenest” models, assessed by their manufacturing processes, qualify for the full £3,750. An extra £1,500 supplemental grant is available for vehicles meeting top-tier sustainability standards, potentially bringing total savings to £5,250 per car.
- Application Process: Car manufacturers apply for the grant on behalf of buyers. Starting 16 July 2025, they submit their EV models for approval based on technical requirements, warranties, and sustainability criteria, such as a verified Science-Based Target (SBT) for emissions reduction. Once approved, discounts are applied automatically at dealerships.
The Department for Transport (DfT) will publish a list of eligible vehicles on its website as models are approved. The RAC predicts discounted EVs could hit showrooms within weeks.
Focus on Sustainable and Domestically Produced EVs
The scheme prioritizes eco-friendly, domestically produced vehicles to boost UK manufacturing and reduce carbon footprints. Manufacturers must meet strict sustainability criteria, including:
- A commitment to net-zero emissions through a verified Science-Based Target (SBT).
- Low carbon emissions in vehicle assembly and battery production, based on the electricity grid’s carbon intensity in manufacturing locations.
While earlier reports suggested UK-made EVs, like the Nissan Leaf, might receive higher grants, the DfT clarified that all vehicles are assessed under the same framework. This ensures fairness but still supports British jobs by encouraging local production. The scheme aligns with the government’s broader £4.5 billion investment in EV adoption, including £63 million for charging infrastructure announced on 13 July 2025.
Why This Matters for UK Drivers
EVs are cheaper to run than petrol or diesel cars, costing as little as 2p per mile with home charging. The UK electric car grant 2025 makes buying one even more attractive. For example, the Dacia Spring, Britain’s cheapest EV at £14,995, could drop to under £12,000 with the full grant. Combined with lower running costs and preferential tax rates, drivers could save up to £1,500 annually compared to petrol vehicles.
However, challenges remain. With only 82,000 public charging points for 1.3 million EVs, some drivers worry about infrastructure. The government’s recent £63 million investment aims to address this, with £25 million for cross-pavement charging solutions for households without driveways.
Industry and Public Reactions
The EV purchase grants reinstated scheme has sparked mixed reactions. Industry leaders, like Mike Hawes from the Society of Motor Manufacturers and Traders (SMMT), welcome the support, saying it sends a “clear signal to consumers that now is the time to switch.” The AA and RAC also praised the initiative, noting it could boost private EV sales, which have fallen 10.8% this year.
However, critics argue the scheme prioritizes net-zero goals over family finances. Shadow Transport Secretary Gareth Bacon called EVs “a product people demonstrably do not want,” citing their high upfront costs. Some drivers, like Londoner Jimmy Kim, feel the financial case for EVs doesn’t stack up against efficient petrol or hybrid options.
What’s Next for the EV Grant Scheme?
The electric vehicle subsidy UK will run until 2028/29 or until funds are depleted. With £650 million, the scheme could subsidize around 173,000 EVs at the maximum grant level. As manufacturers apply, expect more clarity on eligible models soon. The government’s broader plan includes £2 billion over five years to support zero-emission vehicle manufacturing and £1.6 billion to fix potholes, showing a commitment to both green transport and better roads.
Tips for Buying an EV in 2025
If you’re considering an EV, here’s how to make the most of the UK electric car grant 2025:
- Check Eligible Models: Visit the DfT website for the latest list of approved EVs.
- Compare Prices: Look for EVs under £37,000 to maximize savings.
- Consider Sustainability: Models with top sustainability scores offer the highest discounts.
- Plan for Charging: Explore home charging options or nearby public chargers to keep costs low.
- Act Fast: Grants are first-come, first-served, so don’t wait too long.
Final Thoughts
The EV purchase grants reinstated scheme is a game-changer for UK drivers looking to go electric. With up to £3,750 off and an extra £1,500 for sustainable models, the £650 million program makes EVs more affordable than ever. By supporting eco-friendly, domestically produced vehicles, the government is driving the UK toward a cleaner, greener future. Whether you’re a first-time EV buyer or upgrading your ride, the UK electric car grant 2025 could save you thousands. Keep an eye on the DfT’s website for eligible models, and get ready to hit the road with a £3,750 EV discount!
