July 18, 2025
As of 16 July 2025, a new £650 million electric car grant has been made available by the government to offer discounts of up to £3,750 on new fully electric cars worth £37,000 or less.
The previous government electric vehicle grants ended in 2022; however, the Department for Transport (DfT) announced the new grant to support the transition to EVs and incentivise sustainable automotive manufacturing.
This is great news for businesses looking to electrify their company car fleet.
What is the new electric car grant?
The Transport Secretary has announced the Electric Car Grant (ECG) to “make it easier and cheaper to own an electric vehicle”. Drivers can now access grants of up to £3,750 on cars priced at £37,000 or less.
How can manufacturers become eligible?
Eligibility is dependent on the highest manufacturing sustainability standards. The grant amount will be based on a sustainability criteria where manufacturers have a verified science-based emission target. This target is a company’s commitment to reduce its environmental impact, in line with the UK’s international climate commitments.
The manufacturer needs to be able to prove that the CO2 emitted in production for the car is in line with the sustainability criteria.
Manufacturers will be placed in a band based on their sustainability criteria.
- Band 1: The most sustainably manufactured cars will be eligible for up to £3,750.
- Band 2: Cars that meet some environmental criteria will be eligible for up to £1,500.
Cars that don’t meet the minimum sustainability criteria will not be eligible for the grant.
The grant will be available until the 2028/29 financial year.
Who can benefit from the electric car grant?
The new electric car grant is available to anyone who plans to buy or lease an eligible car priced at £37,000 or less. This grant applies to both personal and business customers, including those leasing vehicles. It can help reduce the cost of the deposit as well as the monthly rental payments. However, the car must meet the government’s sustainability criteria. A list of eligible car models will be published on the official government website, which is expected to be released in July.
For more information on how the grant works for leasing customers, read BVRLA’s Electric Car Grant FAQs.
How does the grant impact fleet managers and drivers?
This is a hassle-free grant for fleet managers and their drivers. All paperwork and administration will be handled by manufacturers, dealers and the government.
How does the grant impact salary sacrifice cars?
The grant is also available for eligible salary sacrifice cars. The grant will result in reduced salary sacrifice monthly payments. This, combined with the low BiK rate for electric company cars, could mean significant savings on electric vehicle costs.
What cars are eligible for the electric car grant?
Whilst the grant is available from 16th July 2025, manufacturers still need to apply. Applications will close in 2028.
So far, the following vehicles have been confirmed as eligible for a grant of £3,750:
- Ford E-Tourneo Courier
- Ford Puma Gen-E
The following vehicles are eligible for a grant of £1,500:
- Citroën ë-C3 and ë-C3 Aircross
- Citroën ë-C4 and ë-C4 X
- Citroën ë-C5 Aircross
- Citroën ë-Berlingo
- Citroën ë-SpaceTourer
- Cupra Born
- DS DS3
- DS N°4
- Mini Countryman Electric
- Nissan Ariya
- Nissan Micra
- Peugeot E-208
- Peugeot E-2008
- Peugeot E-308
- Peugeot E-408
- Peugeot E-Rifter
- Peugeot E-Traveller
- Renault 4
- Renault 5
- Renault Alpine A290
- Renault Megane
- Renault Scenic
- Skoda Elroq
- Skoda Enyaq
- Toyota bZ4X
- Toyota Proace City Verso
- Vauxhall Astra Electric
- Vauxhall Combo Life Electric
- Vauxhall Corsa Electric
- Vauxhall Frontera Electric
- Vauxhall Grandland Electric
- Vauxhall Mokka Electric
- Vauxhall Vivaro Life Electric
- Volkswagen ID.3
The discount will be automatically applied at purchase, and customers don’t have to complete any extra paperwork.
The government will continue to provide updates on eligible vehicles. To see the full list, click here: Low-emission vehicles eligible for a plug-in grant.
It is expected that around 50 models will be eligible. However, manufacturers like Tesla, BMW, Audi, and Mercedes are unlikely to be on the list due to the £37,000 grant limit.
The Electric Car Grant portal will open on 11th August 2025. Manufacturers will be able to place orders on the portal from this date. Orders for cars that have been confirmed as eligible between 16th July until the portal opens can be honoured.