Government launches new £3750 Electric Car Grant

Richard Aucock, Contributor
Mon, 11 Aug 2025

Zero-emission vehicles, where at least one version of a given mechanical specification costs £37,000 or less, could be eligible for the government's new Electric Car Grant (ECG), meaning car buyers will benefit from savings of up to 10%.

Since changes to the Expensive Car Supplement — the so-called luxury car tax — were introduced in April 2025 which meant electric cars were no longer exempt, manufacturers have targeted selling EVs priced under £40,000 in order to dodge it. Now that the ECG has been introduced expect imminent model mix realignment and price-shuffling to broaden the range of cars that could qualify for it.

Within the government's ECG rules is an element that ensures several electric cars costing over £37,000 will also qualify for the discount. For that to happen those pricier models must mirror the technical specifications of a version in the range that is priced no higher than the £37k ceiling.

That means if a manufacturer already sells a low-specification variant of an EV for £37k or lower, providing there's no change to the bodywork, battery capacity, which wheels are driven or the electric motor's power output, mechanically identical versions in more expensive trim levels or packed with extra-cost options won't be excluded from the grant.

This detail may encourage car companies to reduce the price of their cheapest EVs to £37,000 or even introduce new special, entry-level models costing below the £37k threshold so that pricier versions are able to qualify for the ECG. Don't be surprised if there's also a flurry of high-specification variants of lower-powered, smaller-batteried electric cars released in the months ahead.

Since the ECG was announced, several brands have already introduced their own discounts ahead of the grants going live on 11 August. Many of those are models which were unlikely to qualify for the grant in the first place.

How do cars qualify for the Electric Car Grant?

Effectively replacing the old Plug-in Car Grant (PiCG) which was discontinued in June 2022 — arguably, too early judging by this new grant's arrival — the ECG's introduction is government's attempt to help overcome a key barrier to electric car adoption — their high up-front costs.

The scheme opened on 16 July 2025 with funding available until at least the 2028/29 financial year. It's the manufacturers, not car buyers, that apply for the ECG, meaning it will be deducted automatically at the point of sale. Car manufacturers' price lists and online configurators will be adapted to reflect the discounted prices.

Those models which qualify for the ECG will be published on a government portal that will be updated regularly to reflect changes to existing model ranges and when new ones are launched.

Eligibility will be based on 'the highest manufacturing sustainability standards,' said the government. This factors-in emissions produced during production which it is understood will most likely incentivise EVs built in the UK and countries geographically closer to it over those manufacured in Asia.

Whether this will encourage more firms to consider British-built EVs or to accelerate existing plans to shift production from China to the UK — as is expected for the MINI Cooper Electric in 2026 — remains to be seen.

Other eligibility criteria for the ECG include the vehicles being:

• Battery- or hydrogen fuel cell-powered
• Cars designed primarily for carrying passengers — classed by the DVLA as M1 vehicles 
• Van-based MPVs if classed as M1 vehicles — goods-carrying vans (N1 and N2) cannot qualify
• Capable of a WLTP Combined cycle driving range of at least 100 miles
• Capable of a maximum speed of at least 60mph — light quadricyles (L6 and L7) such as the Citroen Ami cannot qualify

The government says car buyers will benefit from discounts as soon as manufactures successfully apply for their zero-emission cars to be part of the grant scheme. The most sustainably produced models will be approved for the £3750 Band 1 discount, while those which meet some of the criteria will be eligible for the £1500 Band 2 reduction.

'As the biggest savings will be given to cars with the strongest "green" manufacturing credentials, drivers will be picking models that are not only better for their wallets, but better for the planet too,' said RAC head of policy Simon Williams.

Adam Wood, Renault UK's managing director, which made the best-selling EV for private buyers in April and May said: 'These incentives are extremely welcome and a much-needed signal that government is ready to put tangible action behind the ambitious plans for the transition to electric vehicles that it has outlined.'

Ask HJ

Will charging an EV via a three-pin domestic socket damage the battery?

I would like to purchase an EV but I am unable to have a home charging point installed for a while yet. Will it damage the battery if I charge the car via a 2.3kw 3-pin domestic socket, the extra time it takes is not an issue for me. I am getting conflicting advice from dealers for example. There is little guidance/info on their websites. I always thought it was best to slow charge batteries because they last longer or are EV batteries different?

As a general rule it is possible to charge an electric vehicle from a standard domestic socket, but many manufacturers recommend this is only done in case of emergencies while some do not recommend it at all, primarily due to safety concerns. While using a domestic socket will not cause harm to your EV's battery, typically the wiring in your home is not designed to support outputting at close to its capacity of 3kW for many hours at a time. Home charging points are designed for this purpose and have numerous safeguards to reduce the chances of a fire, as well as being able to charge at a faster rate. If you are unable to have a wallbox installed we would suggest using public charge points the majority of the time and only use a standard domestic socket as a last resort.

Answered by David Ross

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