Electric vehicle grants

Electric vehicles are generally, but not always, more expensive than the nearest petrol/diesel equivalent vehicle. However, a generous government grant, which goes towards the cost of buying your new electric vehicle, usually means the cost will not be too much more. Plus, when you consider the annual savings you can make when you go electric, any additional cost to buy the vehicle can soon be paid back.

The grant applies to both vehicles bought by individuals for their own private use and to companies who are buying electric vehicles to add to their company fleet.

Check out our simple and straightforward savings calculator, to see how much you could save overall.

Why is the government offering financial incentives?

Transport has been identified as one of the major sources of carbon emissions requiring changes to help reduce greenhouse gases. The UK Government is committed to reducing our greenhouse gas emissions by at least 80% by 2050, compared with the levels registered in 1990.

The government has an ambitious vision for almost every car and van to be a zero emission vehicle by 2050. The greater use of ULEVs (Ultra Low Emission Vehicles) will help reduce greenhouse gas emissions and air pollution on the UK's roads, as well as being of economic benefit to all. Worldwide, industrial and domestic sources of pollution are generally reducing over time, whilst pollution from traffic is becoming worse1.

1 EUROPA research into air quality at the European Commission MEMO/07/108, 20/03/2007

What government grants are available?

UK government grant funding covers two areas:

i)           Vehicles

ii)         The charge point for your vehicle, which is available for domestic charge points only.

What is the value of the electric vehicle grant?

The value of the grant is different, depending on what type of plug-in electric vehicle you are buying:

  • 35% off the cost of a 100% electric or an extended range range vehicle, up to a maximum of £4,500
  • 35% off the cost of a plug-in hybrid vehicle (PHEV), up to a maximum of £2,500. PHEVs costing over £60,000 do not qualify for the grant.
  • 20% off the cost of any plug-in electric van, up to a maximum of £8,000 
    As at 23rd Oct 2016 the following announcement was made in regards to a £4 million boost to help businesses switch vans and trucks to electric.

The extension of the Plug-In Van grant will mean N2 vans (3.5 – 12 tonnes gross weight) and N3 vans (over 12 tonnes gross weight) are now eligible.
The proportion of vans in the domestic transport fleet is increasing: new van sales are up 66% between 2010 and 2015, compared with a 30% increase in cars over the same period.
The scheme will be reviewed once 5,000 grants have been processed, or in March 2018, whichever is earlier.
The grant amount is automatically deducted from the price of the vehicle by the dealer when it is purchased, and the dealership also completes all the necessary paperwork.

  • As at 14th Oct 2016 there is now a Plug-in Motorcycle grant - an initial £3.75 million is being made available for motorcycle and scooter riders who want to want to go green, providing them with up to 20% off the cost of an electric motorcycle or scooter. Buyers will be able to claim a maximum discount of £1,500.

The term ‘plug-in’ applies to any vehicle which can be charged by electricity.

The ‘cost’ is the full purchase price you pay for the basic vehicle - including number plates, vehicle excise duty and VAT.

Why is the grant for plug-in hybrids lower?

Whilst plug-in hybrids deliver both fuel and CO2 savings, the UK government wishes to encourage the uptake of the greenest types of electric vehicle on our roads - and these are 100% electric and extended range vehicles.

Both of these types of vehicle will emit zero CO2 over a journey of approximately 100 miles, which is the current range that most electric vehicle batteries will deliver. In contrast, a plug-in hybrid’s battery will give you a journey in “electric mode” of about 25 to 30 miles, although its battery will still help to deliver reductions in CO2 whilst driving using its petrol/diesel engine.

Plug-in hybrids with a list price of over £60,000 are also not eligible for the grant.

The UK Government has stated that the £60,000 cap is to help ensure it is able to fund the plug-in vehicle grant, so that it targets the maximum the number of “mainstream” electric vehicles possible, that the “everyday” company car driver or private motorist will drive – e.g. the Nissan Leaf, VW Gulf, Renault Zoe, Mitsubishi Outlander or the BMW i3. Purchasers of say the Porsche Panamera plug-in hybrid, with a list price of around £85,000 will therefore not receive any grant.

What the grant does not cover

The grant does not include any optional extras, e.g. delivery charges or the first registration fee.

How to claim the vehicle grant

You do not need to apply for the grant separately or pay the full price of the car and then reclaim the benefit. The process of claiming the grant and building it into the price you pay for the vehicle is all taken care of by the dealer, who you purchase your electric vehicle from.

Are all electric vehicles eligible for the grant?

To qualify for the grant, an electric vehicle must emit less than a set target of CO2 and be able to travel a minimum distance using the vehicle's battery, whilst emitting zero CO2 (known as the “zero emission range”).

The good news is that vast majority of plug-in electric vehicles qualify for the grant. 

There are 4 categories of low emission vehicles. The grant you can get depends on the category your vehicle falls into:

  • Category 1:     Target CO2 emissions of under 50g/km and a zero emission range of at least 70 miles.
  • Category 2:     Target CO2 emissions of under 50g/km and a zero emission range between 10 to 69 miles.
  • Category 3:     Target CO2 emissions of 50g to 75g/km and a zero emission range of at least 20 miles.
  • Van:                      Target COemissions of under 75g/km and a zero emission range of at least 10 miles.

Sound confusing? To keep it simple, nearly all 100% electric and extended range vehicles fall into category 1, so they will attract a grant of 35%, up to a maximum of £4,500. Most plug-in hybrids will fall into either category 2 and 3, so they will also attract a grant of 35%, but up to a maximum of £2,500. A couple of high performance plug-in hybrid cars do not meet the criteria and any costing over £60,000 will also not qualify for the grant.

You can use the Energeasy Drive car selector, to help select the right vehicle for you and identify which vehicles qualify for the grant.

How long will the electric vehicle grant be available for?

The UK government has confirmed that the plug in car grant will continue until at least the end of March 2018. This gives both company fleet managers and private drivers alike the opportunity to plan ahead, whether they are considering “going electric” for the first time , or wish to purchase additional electric vehicles.

Other financial incentives & savings

In addition to the grant, there are a number of other incentives and savings which can add up to a significant financial saving each year when you go electric, which means more money in your own pocket! These are:

Click here to learn about the financial incentives available for your electric vehicle charge points.