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THE GOVERNMENT'S NEW £3,750 ELECTRIC CAR GRANT EXPLAINED

July 23, 2025

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THE GOVERNMENT HAS SET OUT ITS PLAN TO HELP REDUCE THE COST OF AFFORDABLE EVs BY INTRODUCING A NEW £3,750 ELECTRIC CAR GRANT FOR NEW EVS SOLD UNDER £37,000

- Tom Jervis

THE GOVERNMENT'S NEW £3,750 ELECTRIC CAR GRANT EXPLAINED

ELECTRIC cars are about to get more affordable, after the UK Government announced the relaunch of an EV grant scheme, which will cut the price of a new zero-emission car by up to £3,750.

The new Electric Car Grant (ECG) will be available on EVs costing less than £37,000, but only those models from manufacturers that have committed to and displayed reductions around emissions targets – although things get even more complicated the deeper you dig.

For example, the government says the ECG will be available in two tiers; only cars deemed the most environmentally friendly will be eligible to receive the full amount. Plus, because only cars costing less than £37,000 will qualify, the UK’s bestselling EV, the Tesla Model Y is among a large list of EVs not in line for government grants.

The £650million total funding for the EV grant would be enough to subsidise around 173,000 electric car purchases at the maximum grant amount of £3,750 per vehicle. That’s about half the total number of EVs registered in the UK last year, so it’s unclear how it will be sustained until the 2028/29 cutoff date.

Confused already? We don't blame you. We’ve read the fine print so you don't have to, to compile a complete guide to the new Electric Car Grant.

WHAT IS THE ELECTRIC CAR GRANT?

THE Electric Car Grant is much like the Plugin Car Grant (PiCG) that was discontinued in 2022, in the sense that it offers buyers a discount on the price of a new EV. However, the ECG is a lot more complex than the scheme that came before it.

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