Updates to the Electric Car Grant

The Government has announced changes to its Electric Car Grant (ECG), which was introduced earlier in the summer, and has been designed to encourage the adoption of electric vehicles through incentives and financial support.

Backed by a £650 million investment, it’s part of the Government’s “Plan for Change” initiative, aimed at making EVs more affordable and boosting uptake across the UK. Since launch, the scheme has already been expanded to cover a wider range of vehicles, with more expected to be added over time.

How do I apply for the Electric Car Grant?

You don’t! The ECG is applied automatically at the point of sale, with no separate application needed by drivers – whether that be Salary Sacrifice drivers, cash buyers, or those taking out finance deals.

How much is the Electric Car Grant worth?

The ECG funding levels are as follows:

£3,750 – Band One – is available for the ‘greenest’ eligible models.
£1,500 – Band Two – is available for other qualifying models.

There is a cap on the retail value, which is currently set at £37,000. If the car you want falls within the £37,000 limit, but optional extras take it over, the price cap rises to £42,000 – so long as the base model of the car you want falls below the £37,000 threshold you will benefit from the grant.

Remember that the grant is applied on the car’s retail value and is available on salary sacrifice schemes too!

How is the Electric Car Grant calculated?

The grant is separated into two “bands”, worth £1,500-3,750 respectively. The cars are assessed on a range of sustainability metrics, with more money available for cars that have a more environmentally friendly production method.

Can I still get the Electric Car Grant through a Salary Sacrifice scheme?

Yes! The grant is applied on the retail value of your car, which means Salary Sacrifice drivers can still get the discount on top of their savings through their Salary Sacrifice agreement.

When does the Electric Car Grant end?

At the moment, it’s set to run until the 2028/29 financial year, so there’s plenty of time to save some money, although you should be aware that the grant ‘pot’ is finite, so if it gets used up before 2029, it could end sooner.

Can I get the Electric Car Grant on a used car?

No, the Electric Car Grant is available for new vehicles only. Used cars, or new cars exceeding £37,000 in value are not eligible to receive the grant.

Are all manufacturers eligible for the Electric Car Grant?

No. Only cars from manufacturers that are signed up to a Science-Based Target (SBT) for cutting emissions (and have shown real progress towards those goals) can qualify for the grant. This ensures that funding supports brands actively working to reduce their environmental impact across both vehicle use and production.