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New Electric Car Grant: How UK Drivers & Businesses Benefit

  • 16th July 2025

On 16 July 2025, the UK Government relaunched its Electric Car Grant to support the transition to zero-emission vehicles. The scheme offers point-of-sale discounts on new electric vehicles (EVs) priced at £37,000 or less, with grants ranging from £3,750 to £1,500, depending on sustainability criteria.

This initiative is part of a broader £650 million EV funding package, designed to accelerate adoption and make low-emission transport more accessible to private drivers and businesses.

Grant Tiers & Eligibility

Band Grant Requirements Example Cars
Band 1 £3,750 EV ≤ £37,000 RRP + high sustainability rating Mini Countryman Electric, Citroën ë‑C4
Band 2 £1,500 EV ≤ £37,000 RRP + moderate sustainability rating Vauxhall Corsa Electric, Renault Zoe
Band 3 £0 EV ≤ £37,000 RRP but with low sustainability (e.g. Chinese-built) MG ZS EV, BYD Dolphin

Excluded:

  • EVs over £37,000

  • Models with low sustainability scores

  • Most Chinese-built vehicles

  • Luxury vehicles such as Tesla Model 3 Long Range, BMW i4, Audi Q4 e‑tron

  • Used electric cars

How It Works

  • Applies at the point of sale

  • Valid for brand-new, UK-registered EVs

  • Available for personal purchase, leasing, or PCP

  • Eligible models must appear on an official government list (expected late July)

  • Manufacturers must meet criteria such as:

    • Science-based emissions targets

    • Sustainable battery sourcing and vehicle production

Who Benefits?

Private Drivers

  • Lower upfront cost for brand-new EVs

  • Reduced monthly payments when leasing or using PCP

  • Fuel savings of up to £1,500 per year vs petrol/diesel vehicles

Leasing Customers

  • Full grant applied to lease price or deposit

  • Ideal for EV salary sacrifice schemes and company car drivers

  • Clarify that Band 3 EVs (e.g. MG, BYD) do not benefit from this grant

Business & Fleet Buyers

  • Reduced leasing costs and tax-efficient fleet electrification

  • Easier transition to EVs with lower BiK tax and operating costs

Example Scenarios

Model RRP Band Grant Estimated Saving*
Mini Countryman Electric £31,000 1 £3,750 ~£100/month saving over 36 months
Citroën ë‑C4 Sense £29,000 1 £3,750 ~£90/month saving
MG ZS EV £26,000 3 £0 Not eligible for discount

*Savings vary depending on lease terms and mileage.

Why This Matters for the UK Market

  • Reduces price gap between EVs and petrol/diesel cars

  • Boosts British and European-made EV competitiveness

  • Supports UK environmental goals and automotive industry jobs

  • Encourages consumers to consider sustainable vehicle options

Frequently Asked Questions (FAQ)

Anyone purchasing or leasing a brand-new EV under £37,000 that meets government sustainability criteria.

Yes. The discount applies to lease and PCP agreements and can be factored into monthly rentals or deposits.

No. Most Chinese-built models fall into Band 3 and do not receive any grant.

No. The scheme only applies to new electric vehicles.

The list is expected in late July 2025, once manufacturers submit their models for approval.

Explore New EV Leasing Deals

We offer lease deals on a wide range of grant-eligible electric vehicles, including:

  • Mini Countryman Electric

  • Citroën ë‑C4

  • Vauxhall Corsa Electric

  • Renault Zoe

All with customisable lease terms, grant discounts applied, and free mainland UK delivery.

Get a quote today and save up to £3,750 on your next EV.

Explore New EV Leasing Deals