New EV grant could cost £389 million in lost car sales

Exclusive research conducted by Britain’s leading consumer champion, What Car? has revealed that new electric vehicle (EV) buyers are delaying their purchase due to confusion over which models will qualify for the new electric vehicle (EV) grant. 

We asked 1854 people who were ready to buy a new car if they had heard of the new EV grant, and 66% of them had, demonstrating that it has been well publicised. 

However, many who were about to buy an EV have put their plans on hold because they don’t know which electric cars will be eligible for the EV grant. One in five (21%) in-market EV buyers told us they are now delaying their purchase to wait for details of the discount. 

If they don’t get the necessary information soon, the introduction of the EV grant could dent sales at one of the busiest times: the 1 September plate change. Last year, 50,000 new EVs were registered during September. 

If buyers have to wait too long to get information about the new grant, EV sales could be down by 21% (10,500 cars) from last year. That number of lost sales (at a price of £37,000 for each new EV) equates to a loss of £389 million in new car sales. 

Although the Government has said car car dealers will be able to process discounts online for new car buyers at showrooms from 11 August, one industry insider told What Car? that car companies may not find out which of their models will be eligible for the grants of £1500 to £3750 until late August, just before the September plate change. 

Even if car makers do know about the discounts before September, the situation is likely to remain confusing for consumers for a number of reasons. 

Although there are more than 50 new EVs with prices starting at £37,00 or less, there’s no guarantee that all models from a specific brand that are priced below the threshold will qualify for the grant. This is because qualification depends on the green credentials of the particular model, car company and the country where the car and its EV batteries are produced. 

It means models sold by European brands that are produced in China, or have EV batteries made in that country, are less likely to get the grant at all or may only receive a discount of £1500, while those from the same brand that are built in Europe, with batteries sourced from there, are more likely to qualify for the full £3750. 

Also consumers cannot safely assume that all versions of a specific model will get the grant because the eligibility criteria also depends on the size of the car’s EV battery pack. So one model with a smaller battery may get the discount, and another with an equally low starting price but bigger capacity battery won’t. 

Confusingly, the grant is not only being given to cars with a recommended retail price of £37,000 or less. If the cheapest version of a model costs less than £37,000 and qualifies for the grant, all the pricier trim levels above it will also get the grant as long as they have the same size battery. 

To add in another complication, there is also an as-yet unknown safety aspect to the grant, which will mean that some cars that are cheap but don’t have the highest safety rating will also be disqualified. 

In spite of all this, What Car? still broadly welcomes the new EV grant and believe that in the long-run it will be a good incentive to encourage more motorists to make the switch. 

What Car? Consumer editor, Claire Evans, said: “The introduction of the EV grant is a welcome initiative that will benefit many EV buyers in the long-term, but the Government needs to act quickly to quell uncertainty about which models will qualify so that sales in the important September plate-change period are not dented.”

“What Car? also believes the Government should introduce other incentives to encourage the uptake of EVs, including reducing the cost of EV charging by cutting VAT on public charging from 20% to 5% to bring it in line with home electricity VAT.”

This is one of eight measures What Car? has called for as part of its EV Manifesto, originally published in January 2025.” 

What are the car companies saying about the new EV grant? 

Although car makers don’t yet know which of their models will qualify for the grant, they are also pleased that the Government has finally introduced it. It is one step towards addressing concerns they have been raising since last year about reaching their ZEV mandate targets. So far this year, EVs have accounted for 21% of all new car sales, but the mandate requires them to be 28% this year and 33% in 2026. 

Lisa Brankin, Ford UK chair and managing director, commented:  “Ford applauds the UK government for taking this step. We have been on the frontline of the conversation, highlighting the urgent need for consumer-based incentives for electric vehicles, and now they have arrived.”

A Volkswagen Group spokesperson stated: “We have been calling for a long time for sensible incentives, and we are pleased the government is offering support, signalling a clear direction of travel and encouraging the adoption of battery electric vehicles. We’re confident a number of cars from the Volkswagen, Skoda and Cupra brands will be eligible and so are making the appropriate applications to confirm which tier of grant applies.”

Eurig Druce, managing director of Stellantis UK, which owns brands including Citroën, Fiat and Vauxhall said: “We particularly welcome the support being aimed at lower priced cars, we have been asking for this for some time.”

Leapmotor, which is also part of the Stellantis Group, is unlikely to qualify for the grants because its models are produced in China. So the brand has taken its own action, reducing the price of its T03 city car by £1500 and taking £3750 off the price of the C10 family SUV. 

Other car makers have also announced automatic discounts on some models: the Kia EV3 and EV4 and the Ora 3 has been given a discount of £3750 and the MG4, MG S5 and Volvo EX30 have £1500 off. 

Read more: Every new car that could be eligible for the new EV grant