Introduction

It has been just over a month since the government’s announcement in July 2025 that they are releasing a new EV Grant, offering £3,750 off the cost of qualifying EVs under £37,000. When you combine this with salary sacrifice savings of up to 50%, many drivers could save more than £7,500 a year on a new electric car.

Backed by £650 million, this scheme will also offer a smaller figure of £1,500 as well as £3,750 off the cost of qualifying EVs. Still confused? In this blog we will make you aware and up to date with the latest information!

Blue Volkswagen ID. 5 parked up outside charging via an Ohme wallbox charger

What is the new Electric Car Grant?

It was mid-July when the UK Government relaunched a major incentive to boost electric vehicle (EV) adoption: The Electric Car Grant (ECG).

There are two discount tiers:

  • Band One - (£3,750 off): For EVs built most sustainably, assessed on factors like lifecycle carbon emissions and verified Science-based targets.
  • Band Two - (£1,500 off): For vehicles meeting basic environmental criteria but not the highest threshold.

Manufacturers must apply to the Department for Transport to list each model as eligible consumers don’t need to apply separately - the discount applies at the point of sale. The Grant officially launched on the 16th July 2025 and will run through at least the 2028/29 financial year. The goal, to help bridge the cost gap between EVs and petrol/diesel cars, and stimulate EV sales among private buyers.

Why aren’t people aware of the scheme?

Despite the headline appeal, awareness remains surprisingly low. A recent survey of over 2,000 drivers found:

  • 64% were unaware of the new grant.
  • Only 13% felt it helped reduce the cost barrier.
  • Many cited limited choice, with just 19% satisfied with the models eligible under the scheme

Several factors contribute to this lack of awareness, including complex rollout and delayed visibility, tight eligibility criteria and confusing messaging and short media attention.

  • The scheme relies on manufacturers to apply model-by-model. Even though it launched mid-July, only a handful of EVs are approved - and almost none qualify for the full £3,750 discount yet.
  • EVs must meet rigorous sustainability standards, including having SBT commitments and lifecycle emissions assessments - this rules out many familiar models, particularly Chinese-made or luxury brands like Tesla or BMW
  • Only 19 models have been approved so far, and most qualify only for the lower-tier £1,500 option
  • Initial announcements garnered coverage, but follow-up communications have been inconsistent
range rover velar PHEV plugged in charging

What needs to change?

People’s choice remains a big hurdle to cross, with only one in five (19%) of respondents said that they are satisfied about the choice of EV models available under the grant, while half (50%) expressed their intentions to see more eligible options before making a purchase.

To ensure the grant achieves its potential, several improvements are needed:

  • Faster expansion of eligible models, especially those qualifying for the full £3,750 grant.
  • Clear, widespread consumer communication, with easy-to-access eligibility lists and simplified criteria.
  • Broader inclusivity, ensuring adaptations for disabled drivers are covered and price caps aren’t barriers.
  • Support for used EVs, to prevent unintended depreciation and help used buyers benefit from incentives

Conclusion

The UK’s new Electric Car Grant is a bold step toward cleaner transport - but its success depends on visibility, eligibility, and inclusivity. To make EV ownership a reality for more households, the scheme must gain traction - for drivers, for industry, and for the environment.