The UK government is launching a new £650 million scheme to encourage drivers to switch to electric vehicles (EVs), offering discount of up to £3,750 on new electric cars priced under £37,000.
Who Qualifies?
The scheme applies to fully electric vehicles with low emissions, and the amount of the discount varies depending on the environmental efficiency of the car:
- Grants range from £1,500 to £3,750
- Available for vehicles under £37,000
- Manufacturers must apply to have their models approved
- Approved models will be discounted at the dealership level, requiring no extra steps by customers
Approved models are expected to begin appearing at dealerships within weeks.
Why Is This Happening Now?
The grant is part of the UK’s push to ban sales of new petrol and diesel cars by 2030. As of now, there are about 1.3 million electric vehicles on UK roads, but only around 82,000 public charging points — a figure the government aims to increase to 300,000 by 2030.
Transport Secretary Heidi Alexander said the scheme will help households and support the UK auto industry in adapting to the “biggest opportunity of the 21st century.”
Cost of Electric Vehicles in 2025
EVs are still generally more expensive up front:
- Average EV price: £49,790 (June 2025)
- Average petrol car price: £34,225
- EV running costs: 6p to 9p per mile at home, 15p to 23p per mile using public chargers (Zapmap data)
Challenges Still Remain
Despite incentives, there are several challenges:
- Limited charging infrastructure, especially for households without driveways
- High home upgrade costs (some rural users quoted £16,500+VAT to increase supply)
- Ongoing concerns over battery degradation and vehicle depreciation
Industry View
Steve Catlin, Managing Director of Vauxhall, acknowledged the grant helps but highlighted the need to boost demand and expand charging infrastructure.
“We’re running at 21.6% EV sales versus a 28% target for the year,” said Catlin.
Real Driver Opinions
- Jimmy Kim, 43, says EVs still don’t make financial sense: “They devalue quickly and the upfront cost is too high.”
- Paul Cole, 38, disagrees: “I charge overnight, we have solar panels — it’s perfect.”
- Carolyn Hammond, 49, wants an EV but can’t justify a £16,500 grid upgrade at her rural home.
Political Divide
Shadow Transport Secretary Gareth Bacon criticized the scheme:
“Labour are forcing families into more expensive EVs before the country is ready… EVs are a product people demonstrably do not want.”
But the government responded that the new incentives make EVs cheaper to buy and run than ever before and are backed by preferential tax rates.
A Look Back at EV Grants /Discounts
- Started in 2011 at £5,000 per vehicle
- Scrapped in 2022 under Conservative leadership
- Previously focused on cars, now shifting support to vans, taxis, motorcycles, and charging infrastructure
Additional Notes:
- A list of eligible vehicles under the new scheme is expected from the Department for Transport in the coming days.
- The new grants are available until 2028 or until the £650 million fund is exhausted.
