The UK government launched its new Electric Car Grant scheme in July 2025, offering substantial discounts to make electric vehicles more affordable. The government’s grant reduces the list price of eligible electric vehicles, with eligibility determined by the list price (manufacturer’s suggested retail price) before any discounts or grants are applied. More than 30 electric cars are now eligible for government-funded discounts of up to £3,750, with Ford models amongst the first models to be confirmed for the maximum grant amount.
The grant operates on two levels based on sustainability criteria. Level 1 vehicles receive the full £3,750 discount, whilst Level 2 cars qualify for £1,500 off the purchase price. To be eligible, electric cars must have a list price at or under £37,000 (the manufacturer’s suggested retail price before any discounts or grants are applied) and meet specific warranty, battery range and environmental standards. The new EV grant is part of the government’s plan to drive Britain forward towards a greener future.
Beyond the government scheme, many manufacturers are offering their own incentives to compete. The approval process continues, with new models regularly added to the eligible list, giving you more choice when shopping for a new EV, including some of the UK’s best selling cars. The grant is designed to put money back into people’s pockets by making electric cars more affordable.
Key Takeaways
- The Electric Car Grant offers up to £3,750 off eligible electric vehicles priced under £37,000
- Two grant levels exist with Level 1 providing £3,750 and Level 2 offering £1,500 based on sustainability scores
- Over 30 electric car models currently qualify with manufacturers adding their own additional discounts
Full list of EVs eligible for the £1,500 discount
- Citroën ë-C3 and Citroën ë-C3 Aircross
- Citroën ë-C4 and Citroën ë-C4 X
- Citroën ë-C5 Aircross
- Citroën ë-Berlingo (one of the most practical EVs, renowned as a practical EV for families and cargo)
- Cupra Born (alloy wheels available as standard on some trims)
- DS DS3 (alloy wheels available)
- DS N°4
- Nissan Ariya
- Nissan Micra (electric version of the popular Micra)
- Peugeot E-208 (a small car with surprisingly good interior space and alloy wheels as standard or optional)
- Peugeot E-2008 (alloy wheels available)
- Peugeot E-308 (alloy wheels available)
- Peugeot E-408
- Peugeot E-Rifter (practical EV, alloy wheels available)
- Renault 4
- Renault 5 (small car)
- Renault Alpine A290
- Renault Megane
- Renault Scenic
- Vauxhall Astra Electric
- Vauxhall Combo Life Electric (practical EV)
- Vauxhall Corsa Electric (small car, alloy wheels available)
- Vauxhall Frontera Electric
- Vauxhall Grandland Electric
- Vauxhall Mokka Electric (alloy wheels available)
- Volkswagen ID.3 (alloy wheels available)
Citroën E models are known for their impressive value and practicality, making them some of the most practical EVs on the market.
Overview of the Electric Car Grant
The UK government launched a new electric car grant scheme in July 2025 as part of its commitment to accelerate electric vehicle adoption. This £650 million programme provides direct financial assistance to buyers purchasing eligible new electric vehicles. The grant applies to each eligible vehicle, not per person, ensuring that every qualifying car purchased receives the subsidy.
Meaning customers who purchase eligible vehicles benefit directly from the grant, making electric cars more affordable and accessible.
This scheme is backing drivers in the transition to electric motoring, supporting the broader shift toward sustainable transport.
Other manufacturers are also adjusting their pricing and incentives to compete with the grant scheme, further expanding options for consumers.
Purpose and Background
The ([LINK 1]Electric Car Grant scheme) aims to make electric vehicles more affordable for UK consumers. You receive the discount automatically at the point of purchase without needing to apply separately.
The government designed this programme to replace previous electric vehicle incentives. It targets zero-emission vehicles that meet strict sustainability and performance criteria.
The scheme supports the UK’s transition to cleaner transport. It helps reduce the upfront cost barrier that often prevents consumers from choosing electric vehicles over petrol or diesel alternatives.
Key objectives include:
- Reducing CO2 emissions from transport
- Supporting the automotive industry’s electric transition
- Making EVs accessible to more buyers
- Accelerating market adoption of clean vehicles
Funding and Scheme Timeline
The government allocated £650 million to fund the new Electric Car Grant programme. This represents a significant investment in clean transport infrastructure.
The scheme officially launched on 15 July 2025. Vehicle manufacturers then had to apply for their models to be assessed for eligibility.
The first eligible vehicles were confirmed in late July 2025. Additional models continue to be added as manufacturers complete the application process.
The programme currently offers two discount bands:
- Band 1: Up to £3,750 discount
- Band 2: Up to £1,500 discount
Integration with Plan for Change
The Electric Car Grant forms a central component of the government’s broader environmental strategy. It directly supports commitments to achieve net-zero carbon emissions by 2050. Achieving net zero emissions is a key government objective, ensuring that climate action aligns with global goals such as the Paris Agreement.
The scheme aligns with plans to phase out new petrol and diesel car sales and is designed to support science based targets. It follows the Science Based Targets initiative (SBTi) framework to ensure credible, science-aligned climate action. This creates a clear pathway for consumers to transition to electric vehicles before traditional engines become unavailable.
Your purchase through this grant contributes to wider infrastructure development. The government uses EV adoption data to plan charging network expansion and grid capacity improvements. Manufacturers participating in the programme must set science based targets to demonstrate their commitment to net zero emissions and to qualify for support.
The programme also supports domestic automotive manufacturing. It encourages investment in UK-based electric vehicle production and battery technology development.
Eligibility Criteria for the EV Grant
The Electric Car Grant (ECG) has specific rules that determine which electric vehicles qualify for government funding. Cars must meet price limits, technical standards, and sustainability requirements to receive the discount.
Vehicle Type and Price Limits
Your electric car must be classified as an M1 passenger vehicle to qualify for the ECG. This covers standard cars, electric SUVs (a popular category for their practicality and features), and people carriers designed for personal use. Many people carriers and SUVs offer more room for passengers and cargo, making them ideal for families or those needing extra space.
The most important rule is the price cap. Cars must cost £37,000 or less to be eligible for the grant. This price includes VAT and any optional extras. Vehicles with a smaller battery may be more affordable but typically have reduced range, making them suitable for city driving, while some eligible models offer long range versions for extended travel.
Commercial vehicles like vans and trucks have separate grant schemes. Motorbikes and other vehicle types also qualify for different programmes outside the main car grant.
The price limit ensures the grant supports affordable electric vehicles. Luxury cars above this threshold don’t receive government funding.
Battery Range and Technical Requirements
Electric vehicles must produce 0g CO2 per kilometre at the tailpipe to qualify. This means only pure electric cars are eligible, not hybrid vehicles that use petrol or diesel engines.
Your car needs a minimum battery range of 100 miles on a single charge. This range must be measured using official testing standards, not manufacturer estimates.
The battery pack requires an 8-year or 100,000-mile warranty, whichever comes first. This protects you against battery degradation and defects.
These technical requirements ensure only capable electric vehicles receive funding. The range minimum guarantees your car can handle daily driving without frequent charging stops.
Sustainability and Manufacturer Standards
Electric car manufacturers must meet minimum sustainability criteria for their vehicles to qualify. These standards cover the production process and materials used in the car.
The sustainability requirements include responsible sourcing of battery materials like lithium and cobalt. Manufacturers must also demonstrate environmental responsibility in their supply chains.
Companies need to show their electric vehicles are genuinely sustainable, not just zero-emission during driving. This includes recycling programmes for old batteries and eco-friendly manufacturing processes.
The government reviews these standards regularly to ensure electric car production remains environmentally responsible as the industry grows.
Warranty and New Car Conditions
Your electric car must come with a comprehensive 3-year or 60,000-mile warranty, whichever you reach first. This covers the entire vehicle, not just the battery system.
The grant only applies to brand new cars bought from authorised dealers. Second-hand electric vehicles don’t qualify for government funding, even if they meet all other requirements.
You don’t need to apply for the grant separately. The car dealer automatically deducts the discount from your purchase price when you buy an eligible vehicle.
The warranty requirements protect buyers from defects and repairs during the early years of ownership. This gives you confidence when switching to electric driving for the first time.
If you are considering a lease agreement, be aware that exceeding the agreed mileage limit may result in excess mileage charges.
How Much is the Grant? Levels and Amounts Explained
The Electric Car Grant offers two distinct discount levels based on how well each vehicle meets the government’s sustainability criteria. The maximum £3,750 grant goes to the most sustainable models, whilst less sustainable EVs receive £1,500 off.
Level 1: £3,750 Grant
You can receive the maximum £3,750 discount on electric cars that score most favourably against the government’s sustainability standards. These Level 1 vehicles represent the cleanest and most environmentally friendly options available through the scheme.
Currently, only two models qualify for the full £3,750 grant amount:
- Ford Puma Gen-E – £3,750 discount
- Ford E-Tourneo Courier – £3,750 discount
These Ford models became the first to offer maximum savings when they joined the scheme in August 2025. The £3,750 grant represents a substantial reduction that can make electric vehicles more competitive with petrol and diesel alternatives.
More manufacturers are expected to apply for Level 1 status as the scheme expands.
Level 2: £1,500 Grant
Level 2 vehicles receive a £1,500 grant when they meet basic sustainability requirements but don’t achieve the highest environmental standards. This discount level applies to most currently eligible electric cars.
Several popular models qualify for the £1,500 discount, including:
- PEUGEOT E-308 – £1,500 discount
- PEUGEOT E-408 – £1,500 discount
- DS DS 3 – £1,500 discount
- DS Nº4 – £1,500 discount
Whilst smaller than the maximum grant, the £1,500 reduction still provides meaningful savings. This amount helps bridge the price gap between electric and conventional vehicles, making EVs more accessible to everyday drivers.
The government continues to assess manufacturer applications, so more models may qualify for either grant level soon.
List of Eligible Electric Cars by Brand
The grant covers vehicles from major manufacturers including French brands Citroën, DS and Peugeot, American manufacturer Ford, and Japanese brand Nissan. Most models qualify for the £1,500 Band Two discount, whilst only two Ford models receive the maximum £3,750 Band One reduction.
Citroën and DS
Citroën offers the largest selection of grant-eligible electric vehicles, with seven models qualifying for the £1,500 discount. The ë-C3 starts at £20,595 after the grant, making it one of the most affordable options available.
The ë-C3 Aircross provides more space as a seven-seat SUV option. It costs £21,595 after the grant and offers 247 miles of range from its larger battery pack.
For family buyers, the ë-C4 hatchback and ë-C4 X saloon both qualify. The saloon variant provides 130 litres more boot space at 510 litres total capacity.
The largest Citroën option is the ë-C5 Aircross SUV. It features a 73kWh battery providing 322 miles of range and costs £32,565 after the grant reduction.
DS Brand Options
The premium DS brand contributes the Nº4 model to the eligible list. Priced at £35,495 after the grant, it offers 278 miles of range and 210bhp performance.
Ford Models
Ford secured both Band One grant positions with its newest electric models. The Puma Gen-E receives the maximum £3,750 discount, reducing its price to £25,249.
This electric crossover delivers 233 miles of range and 100kW charging speeds. It maintains the petrol Puma’s large boot despite its compact size.
The E-Tourneo Courier also qualifies for the full £3,750 reduction. Originally priced at £33,690, it costs £29,940 after the grant application.
This five-seat MPV offers exceptional practicality with 2,162 litres of cargo space. However, its range is limited to 177 miles compared to other grant-eligible vehicles.
Nissan Range
Nissan made significant price adjustments to ensure grant eligibility for its models. The Ariya SUV saw a dramatic £6,000 price reduction before the grant application.
After both reductions, you can purchase an Ariya from £33,500. All qualifying variants use front-wheel drive with either 63kWh or 87kWh battery options providing up to 310 miles of range.
The Micra returns as an all-electric hatchback sharing underpinnings with the Renault 5. It costs £21,495 after the £1,500 grant discount.
Two battery sizes are available: 40kWh and 52kWh units. The larger battery provides 260 miles of official range with 100kW maximum charging speeds.
Peugeot Line-up
Peugeot contributes four models to the eligible vehicle list, all receiving the £1,500 Band Two discount. The e-208 supermini becomes more affordable at £28,650 after the grant reduction.
You can choose between 50kWh and larger battery options. The bigger battery provides 268 miles of range according to Peugeot’s official figures.
The e-2008 SUV offers family-friendly practicality with a 434-litre boot. It costs £33,900 after the grant and provides 247 miles of range from its 54kWh battery.
For maximum versatility, the e-308 comes as both hatchback and estate variants. The estate version offers 508 litres of boot space whilst the hatchback provides 361 litres.
The e-Rifter MPV completes Peugeot’s grant selection. Priced at £30,750 after the discount, it accommodates up to seven passengers and shares components with the Citroën ë-Berlingo.
More Eligible Models: Alpine, Cupra, Renault, Vauxhall, Volkswagen, Skoda, Toyota
Several major European and Japanese brands have models approved for the Electric Vehicle market, including the latest releases. Notably, the new Vauxhall Frontera is making its return to the market, bringing a sense of nostalgia with modern updates. Renault’s range includes e tech models, which feature advanced hybrid and plug-in hybrid technology for enhanced practicality and value. When considering driving characteristics, some of these models stand out for their excellent body control, providing a smoother and more engaging driving experience, especially around corners and over bumps.
EV Discounts Beyond the Government Grant
Many manufacturers offer their own discounts on electric cars eligible for the official scheme, whilst other financial incentives can further reduce your total cost. These additional savings often match or exceed government grant amounts.
Manufacturer-Backed Discounts
Car manufacturers have introduced their own discount programmes in response to the government’s Electric Car Grant announcement. Many brands offer discounts equivalent to the government’s grant on models that may not qualify for official support.
Some manufacturers apply these discounts whilst awaiting approval for the government scheme. Others use them as a competitive response when their vehicles don’t meet the strict eligibility criteria.
These manufacturer discounts typically range from £1,500 to £3,750. They mirror the government grant structure to maintain market competitiveness.
Popular brands offering manufacturer-backed ev discounts include BMW, Mercedes-Benz, and Audi. These discounts often apply to higher-specification models that exceed the £37,000 price threshold.
Salary Sacrifice and Business Schemes
Salary sacrifice schemes allow employees to lease electric cars through their employer with significant tax savings. You pay for the vehicle from your gross salary before income tax and National Insurance deductions.
This arrangement can save you up to 40% on total running costs compared to personal finance agreements. Higher-rate taxpayers benefit most from these schemes.
Business users can also claim capital allowances of up to 100% in the first year for electric cars eligible under company car schemes. This creates substantial tax relief for business purchases.
Many employers partner with specialist providers to offer salary sacrifice schemes. The schemes often include insurance, maintenance, and charging costs in monthly payments.
Other Financial Incentives
Local authorities across the UK offer additional grants for electric vehicle purchases. These vary by region but can provide extra savings of £500 to £2,000.
Home charging point grants remain available through the OZEV scheme. You can claim up to 75% of installation costs, capped at £350 for most installations.
Some energy suppliers offer special tariffs for electric vehicle owners. These provide cheaper overnight charging rates, reducing your running costs significantly.
Congestion charge exemptions in London and other cities provide ongoing savings. Electric cars also benefit from reduced road tax rates and lower benefit-in-kind tax for company car users.
Applying for the Grant and Purchase Process
The Electric Car Grant is automatically applied as a discount at the point of sale, so you don’t need to submit a separate application. Dealerships handle the grant application process, while certain buyers may have different eligibility requirements depending on their purchase type.
How to Access the EV Grant
You do not apply for the grant yourself when purchasing an electric vehicle. The seller automatically includes the discount in the purchase price when you buy an eligible car.
The grant amount depends on the vehicle’s sustainability band:
- Band 1 cars: Up to £3,750 discount
- Band 2 cars: Up to £1,500 discount
Your chosen electric vehicle must meet specific criteria to qualify. The car needs zero tailpipe emissions, a minimum 100-mile battery range, and proper warranty coverage.
The discount appears on your final invoice. You’ll see the original price minus the grant amount as your total cost.
Dealership and Online Applications
Car dealerships handle all grant paperwork on your behalf. They submit applications through the government’s online portal system.
Vehicle dealerships and manufacturers can apply for grants using the online portal. This means the administrative burden falls on the seller, not you as the buyer.
When you visit a dealership, they’ll confirm whether your chosen electric vehicle qualifies for the grant. The discount gets processed during your purchase transaction.
Online car retailers follow the same process. They’ll show the discounted price including the grant reduction when you complete your purchase.
Eligibility for Private, Lease, and Business Buyers
Private buyers can access the Electric Car Grant when purchasing eligible electric vehicles from authorised dealers. The discount applies to both cash purchases and finance agreements.
Lease customers may benefit from reduced monthly payments. Leasing companies often pass the grant savings onto customers through lower rental costs.
Business buyers purchasing electric vehicles for company fleets can claim the grant. The same eligibility criteria apply regardless of whether you’re buying for personal or business use.
The grant doesn’t affect other incentives you might qualify for. You can still claim business tax benefits or salary sacrifice schemes alongside the Electric Car Grant discount.
Frequently Asked Questions
The EV grant scheme operates under specific rules that determine eligibility, discount amounts, and application processes. Key considerations include vehicle price limits, sustainability criteria, and whether you’re purchasing new or used electric cars.
What are the criteria for a vehicle to qualify for the EV tax credit in 2025?
Your vehicle must cost £37,000 or less to qualify for the Electric Car Grant. The car needs to meet sustainability standards set by the government.
You can only claim the grant on new electric vehicles. The manufacturer must apply for their models to be included in the scheme.
All eligible cars must also meet warranty and battery range requirements. The government assesses each application against these criteria.
Are second-hand cars eligible for the EV tax credit and, if so, under what conditions?
The Electric Car Grant only applies to new electric vehicles. You cannot use this scheme for second-hand or used electric cars.
The government focuses the £650 million investment on new vehicle sales. This approach aims to boost the automotive industry and create jobs.
If you want to buy a used electric car, you’ll need to look for other financing options or manufacturer discounts.
What are the specific requirements for hybrid vehicles to be eligible for tax credits according to the IRS?
The UK Electric Car Grant only covers fully electric vehicles. Hybrid cars, including plug-in hybrids, are not eligible for this scheme.
You must purchase a battery electric vehicle (BEV) that produces zero emissions. The government designed the grant to promote the cleanest possible vehicles.
Only pure electric models that meet all sustainability criteria can qualify. Petrol-electric hybrids don’t meet these requirements.
Is there an income threshold for claiming the tax credit for electric cars in 2025?
The UK Electric Car Grant has no income limits or eligibility restrictions based on your earnings. Any buyer can claim the discount if they purchase an eligible vehicle.
The scheme aims to make electric cars accessible to working families across all income levels. Your salary or household income doesn’t affect your eligibility.
You simply need to buy an eligible new electric car priced under £37,000. The government investment puts money back in working people’s pockets regardless of income.
What is the process for claiming the £4,000 tax credit for used electric vehicles?
The UK doesn’t currently offer a £4,000 tax credit for used electric vehicles. The Electric Car Grant only applies to new cars with discounts of £1,500 or £3,750.
You cannot claim government grants on second-hand electric vehicles. The current scheme focuses exclusively on new vehicle purchases.
Some manufacturers offer their own discounts on used cars, but these aren’t government grants. You’ll need to check with individual dealers for any available used car offers.