On the 15th July 2025, the UK government announced the return of a major incentive for electric vehicle (EV) buyers: the Electric Car Grant (ECG).
This updated scheme is designed to make EVs more affordable for everyday drivers by offering a discount of up to £3,750 off the price of a new electric car.
If you’re considering making the switch to an EV - or already exploring electric vehicle finance - this is a timely opportunity to save money and go green.
The Electric Car Grant is a government-backed scheme designed to reduce the upfront cost of new electric cars. It follows on from the earlier Plug-in Car Grant, which was phased out in 2022. Now reintroduced with a new structure and funding, the ECG is part of the UK’s broader strategy to encourage the switch to low- and zero-emission vehicles.
With a budget of £650 million secured until 2028/29, the grant specifically targets private buyers and aims to close the affordability gap between petrol/diesel vehicles and their electric counterparts.
Unlike the previous scheme, the new ECG has been carefully designed to support not only greener vehicles but also greener manufacturing. To qualify for the grant, vehicles must be manufactured by companies that have signed up to science-based climate targets. This means brands that can demonstrate a commitment to reducing emissions across their supply chain will be prioritised.
As a result, some premium EVs - like those from Tesla and BMW - do not currently qualify for the grant, while more affordable models with lower environmental footprints are eligible for either a £3,750 or £1,500 discount.
One of the key advantages of the Electric Car Grant is its simplicity. If you’re buying a qualifying EV, the discount is automatically applied at the point of purchase by the dealership. There’s no need for customers to apply separately. All you need to do is choose an eligible electric car with a list price of £37,000 or less, and the dealership will handle the rest.
The grant amount is then deducted from the final sale price - either £3,750 or £1,500 depending on how sustainable the vehicle’s production process is. The scheme operates on a first-come, first-served basis, so it's worth acting early while funding is still available.
The reintroduction of the ECG is a response to slowing demand for electric vehicles among private buyers. While fleet and company EV sales have continued to grow, many individual drivers remain hesitant - largely due to higher upfront costs and concerns about charging infrastructure. By bringing back financial support, the government hopes to accelerate adoption and stay on track to meet its 2030 net-zero targets.
Alongside the grant, additional investment - such as a £63 million package to support on-street and home EV charging - aims to make EV ownership more convenient and accessible.
The reintroduction of the Electric Car Grant makes electric vehicles more attainable for everyday drivers. By reducing the upfront cost of a new EV by up to £3,750, the scheme lowers one of the key barriers to making the switch.
With more affordable models now qualifying and a greater focus on sustainable manufacturing, buyers have a wider and greener range of options to choose from. Combined with ongoing investment in charging infrastructure, this move could help more people confidently transition to electric driving.
Final thoughts
The return of the Electric Car Grant is great news for drivers looking to go electric in a cost-effective way. It’s a clear signal that the UK is serious about supporting cleaner transport—not just in the vehicles we drive, but in how they’re made.
If you’re ready to take the next step toward owning an electric car, talk to us about how we might be able to help you finance it - with the ECG now in place, making the switch to electric could be easier and more affordable than ever before.
