The UK government has officially reintroduced a new electric car grant scheme, offering buyers up to £3,750 towards the purchase of a fully electric vehicle. The policy, announced on 16 July 2025, is designed to accelerate EV adoption ahead of the 2035 ban on new petrol and diesel cars and aligns with the UK’s net-zero emissions target for 2050.
Key Details of the New EV Grant
- Two Grant Levels:
- £3,750 for EVs meeting the strictest carbon footprint requirements.
- £1,500 for eligible EVs that do not fully meet production emission benchmarks.
- Eligibility Criteria:
- Vehicle must cost under £37,000 (with a new £42,000 hard cap to close loopholes).
- Must have zero tailpipe emissions, a WLTP range of at least 100 miles, and an 8-year/100,000-mile battery warranty.
- Car makers must commit to a science-based target for carbon reduction.
- Vehicle assembly and battery cell production emissions must remain below government-set thresholds.
- Funding:
- The scheme is backed by a £650 million fund, projected to last until 2028–29, or until resources are exhausted.
Winners and Losers Under the New Electric Car Scheme
Not all EVs qualify for the top-tier discount. Vehicles produced in low-emission factories, particularly in the UK and Europe, stand to benefit the most.
- Full £3,750 Discount:
- Nissan Leaf (built in Sunderland, UK)
- Ford Puma Gen-E (assembled in Romania with renewable energy use)
- Ford E-Tourneo Courier
- £1,500 Discount Only:
- Citroën ë-C3
- Renault Scenic
- Renault 4
- Renault 5
- Likely Excluded:
- Many Chinese-built EVs are expected to miss out due to higher carbon emissions during manufacturing. Brands such as MG and Leapmotor have already preemptively slashed UK prices by £1,500–£3,750 to remain competitive.
Industry Impact and Market Reactions
The grant’s announcement was initially chaotic. With limited details revealed at first, many potential buyers delayed purchases, contributing to a 5% drop in UK new car registrations in July 2025 compared with the same month last year.
Chinese automakers have voiced strong criticism, arguing the policy effectively penalises them despite their EVs being among the cheapest in the market. European and UK manufacturers, however, stand to gain significantly.
Top EV Buys with the New Grant
For buyers ready to take advantage, several strong contenders qualify for the new discounts:
- Renault 5 – Recently crowned 2025 Car of the Year, agile, stylish, and now even more affordable.
- Škoda Elroq – A spacious, refined electric SUV offering near-luxury comfort.
- Renault Scenic – A family-focused EV SUV with a long driving range and five-star safety rating.
- Renault 4 – Compact and urban-friendly, with competitive range and pricing.
- Ford Puma Gen-E – Fun to drive with clever practicality, now among the best-value EVs in its class.
Background: A Return to Incentives
The new initiative revives the spirit of the Plug-in Car Grant (2011–2022), which delivered over 400,000 claims and nearly £1.5 billion in discounts before being scrapped. At that time, the grant was instrumental in making EVs more accessible, helping bridge the price gap between electric and combustion models.
Today, with EVs still typically more expensive than petrol or diesel alternatives, this renewed grant aims to push mainstream adoption forward while ensuring production aligns with sustainability benchmarks.
Outlook
While details on the government’s exact emissions thresholds remain unclear, the policy already appears to reshape the EV landscape. Buyers are set to benefit most from UK- and EU-assembled EVs, while Chinese brands face mounting challenges.
As the £650 million fund begins to roll out, competition among manufacturers is expected to intensify, giving UK car buyers more affordable, eco-conscious choices in the rapidly growing EV market.
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