Electric Car Grant 2025
On the 15th July 2025, the Government announced a new £650 million grant to support the adoption of electric vehicles (EVs), which is in place for eligible orders after the 16th July 2025. The grant will apply to eligible EVs with a recommended retail price (RRP) under £37,000.
The level of support will also be based on the sustainability of the car manufacturing:
• Band 1: Up to £3,750
• Band 2: Up to £1,500
What does this mean for EVs on a salary sacrifice scheme?
As part of a salary sacrifice car scheme, offering income tax and NI savings and the 3% Benefit-in-Kind rate, these grants make electric cars even more affordable for drivers. The scheme will be administered by vehicle manufacturers, with no additional paperwork needed from drivers.
Grant detail & criteria
The £650 million ECG scheme aims to encourage the switch to new electric vehicles (EVs) and runs until at least the 2028‑29 financial year. It’s available to private individuals, business buyers, and salary sacrifice schemes for new EVs registered on or after 16 July 2025. It can’t be applied retrospectively to earlier orders or pre-registered cars.
The grant incentivises the cleanest manufacturers, meaning that those who are committed to a Science-Based Target (SBT) and have a history of real emission reduction progress could qualify for the discount. Only vehicles approved by the government’s Department for Transport (DfT) and Vehicle Certification Agency (VCA) may receive the grant.
Manufacturer must also meet environmental criteria:
- Hold verified Science‑Based Targets (e.g. 42% emissions reduction by 2030, net-zero by 2050)
- Demonstrate low-carbon emissions in vehicle assembly and battery production
Vehicle eligibility requirements:
New EVs only with zero tailpipe CO₂ emissions and a Retail price under £37,000.
Minimum 100 mile WLTP battery range and a battery capacity guarantee.
Battery warranty of 8 years or 100,000 miles and a warranty of 60,000 miles or more for other components.
Frequently Asked Questions