In a move aimed at accelerating the adoption of electric vehicles (EVs), the UK government is bringing back financial incentives for buyers of brand-new zero-emission cars. Backed by a £650 million fund from the Treasury, the new grant scheme offers buyers up to £3,750 off the cost of an eligible electric car — a significantly larger incentive than what was previously available under the former Conservative Government.
The scheme will apply to EVs priced at £37,000 or below, with support available from 16 July 2025 until the 2028–29 financial year. This marks a notable shift from the previous scheme, which ended in June 2022 and provided a smaller grant of £1,500.
Eligibility for the new Electric Car Grant (ECG) will be open to manufacturers who meet strict sustainability standards in their production processes. Once approved, car makers can offer eligible customers a discount at the point of sale.
The government’s wider strategy includes making EV ownership more affordable and accessible. Currently, two in five used electric cars are selling for less than £20,000, and over 30 new models are available under the £30,000 mark.
At the lower end of the price spectrum is the Citroën Ami — available from £7,695 — though it’s technically classed as a quadricycle due to its size and top speed of just 28 mph. More practical options include the Dacia Spring (£14,995, range up to 140 miles) and the Leapmotor T03 (£15,154, range up to 164 miles). Higher up the range, the BYD Dolphin Surf starts at £25,490 and Ford’s Puma Gen-E at £29,995. However, vehicles like the Tesla Model 3 and Ford’s new Capri will be excluded from the scheme as their entry-level prices exceed the £37,000 cap.
The ECG also complements a recent £63 million funding announcement to expand home-charging options for households without driveways. It forms part of a broader effort to enhance EV infrastructure, including plans to electrify NHS vehicle fleets and support the installation of charging points at business locations.
According to official data, the UK now has over 82,000 public EV charge points, with around 50 new ones added daily.