Number of cars eligible for EV grant reduced under new rules

The number of cars which qualify for the Government's recently-introduced Electric Car Grant (ECG) has been cut following the introduction of a new £42,000 price cap.

The new cap, announced today, means that some high-end models which were previously thought to be eligible now won't qualify.

Previously, the grant was based on the particular model of car you're choosing and, as long as the cheapest trim cost less than £37,000, all of the other trims with the same motor and battery would also qualify. In practice, that meant that as long as the starting point of the car was less than £37,000, you could get the discount on a version costing a lot more.

For example, all versions of the front-wheel-drive Nissan Ariya were previously eligible for the £1500 discount after a new entry-level variant costing less than £37,000 was introduced. The discount included the £44,500 Evolve trim version, but with the new £42,000 cost cap, it will no longer qualify.

The grant was introduced last month as part of the Government’s Plan for Change, with a financial backing of £650 million. Eligibility for the grant is not just based on price, but also on sustainability criteria, details of which the Government has not disclosed. Cars will fall into one of two bands: those in ‘band one’ will receive the full £3750 discount, while those in ‘band two’ will receive up to £1500.

So far, just two models have officially qualified for the full band one amount: the Ford Puma Gen-E small SUV and the Ford E-Tourneo Courier MPV. Every other eligible model has only received the smaller £1500 discount.

According to the Department for Transport, these bands (which may increase from two) will depend on how much CO2 is emitted during a car’s production – though specific figures aren’t yet revealed.

The scheme will be funded until the 2028/29 financial year, with the aim of reducing the upfront cost gap between petrol and electric vehicles.

The announcement comes as electric car sales fall massively behind government targets, with full EVs currently accounting for just 21.6% of the new car market, according to figures from the Society of Motor Manufacturers and Traders (SMMT). That’s significantly less than the 28% set out in the ZEV Mandate for 2025.

Currently, fleet and company car buyers make up most of the electric car market, thanks to the significant benefit-in-kind tax incentives they receive. However, the new Electric Car Grant will aim to make EVs more accessible to private buyers and resolve shortfalls in sales.

SMMT Chief Executive Mike Hawes said, “Today’s announcement of the return of government support for the purchase of electric vehicles is a clear signal to consumers that now is the time to switch.

“Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade. This announcement is a welcome response to consistent calls from the industry for more support, which will be in addition to the substantive subsidies already provided by manufacturers.”

This is not the first time grants have been offered by the government for electrified vehicles. The Plug-in Car Grant (PiCG), introduced by the previous Conservative government in 2016 offering £1500 discounts on EVs priced at less than £32,000, was scrapped three years ago. Unlike that scheme, it will be manufacturers who must apply for the Electric Car Grant instead of car buyers.

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