Government electric car grant: the complete guide

All you need to know about the £2,500 government grant for electric vehicles (EVs) under £35,000, and which models are eligible

Chris Rosamond
Jul 15, 2021

The government’s electric car grant is paid out by the Department for Transport’s Office for Zero Emission Vehicles (OZEV), and is designed to make the transition to electric car (EV) ownership more affordable for more drivers.

The incentives are in place because the large battery packs involved in manufacturing plug-in models currently make electric cars more expensive than equivalent petrol- and diesel-powered models. Electric car prices are predicted to move towards parity with traditional petrol and diesel models in coming years, so we can expect grant levels to fall as they do.

This scheme has helped put the UK towards the front of the transition to electric vehicles. With nearly half a million plug-in cars on UK roads as of mid-2021, only Germany has more low-emission vehicles on the road in Europe, though countries such as Norway have a very high proportion of electric cars already on their roads.

How much is the electric car grant worth?

The amount of the electric car grant - often referred to as the Plug-in Car Grant (PICG) - has fallen steadily since its introduction in 2011. Back then it was worth up to 35% of the cost of a new vehicle, with a £5,000 cap. The EV grant limit is now capped at £2,500 and it’s only available on cars costing less than £35,000.

Grants for electric vans and motorbikes are also available, but these too have been significantly reduced over the years. Nowadays buyers of small electric vans (under 2.5 tonnes) get a maximum grant of 35% of the list price, capped at £3,000. For bigger vans the cap is £6,000. Motorbikes and mopeds also qualify, and the OZEV grant will pay 20% of the purchase price up to £1,500.

There are also government incentives towards the cost of home charging points for both new and used electric and plug-in hybrid car buyers. Like the PICG, these grants are funded from taxpayers’ cash and distributed by OZEV, and are currently worth up to 75% of the cost of your home wallbox installation with a cap of £350.

How the Plug-in Car Grant works

Grant payments are not made directly to consumers which makes life nice and easy if you’re an EV buyer, because you don’t need to do anything at all. Dealers who sell qualifying cars have to claim the cash from OZEV after each sale is made, but they also have to reduce their retail prices up front. That’s why it’s normal to see new EVs advertised with prices that include the electric car grant.

Used cars have never been eligible for the grant, but buyers of second-hand electric cars benefit from the knock-on effect of lower new prices. It’s part of the reason that second-hand values of EVs listed here on BuyaCar can be so attractive.

UK electric car grant

  • Relatively affordable electric cars such as the Nissan Leaf, Renault Zoe and Peugeot e-208 attract grants of £2,500.
  • EVs costing more than £35,000 including the Ford Mustang Mach E and Tesla Model 3 are not eligible.
  • Plug-in hybrids, including the Mitsubishi Outlander PHEV and Mini Countryman PHEV are not eligible.
  • Electric motorbikes and mopeds are eligible for £1,500 grants.
  • If you’re buying an electric van, you could get a discount of up to £6,000.
  • Almost all electric vehicles qualify for a grant of up to £350 towards a home charging point.

Which cars qualify for the electric car grant?

Grants were formerly available for both fully-electric cars and plug-in hybrids (PHEVs), but a rule introduced in 2018 stated that all eligible cars had to be able to travel at least 70 miles in zero-emission mode. That covers all EVs on sale today, but there are no PHEVs that can do this, as they typically have a maximum battery-only range of less than 40 miles. Nonetheless, the grant is still officially referred to as the Plug-in Car Grant, even though not all ‘plug-ins’ qualify.

As set out above, the grant doesn’t include EVs costing over £35,000 either, and individual models have to be approved by OZEV before they are eligible - it doesn’t happen automatically. Scroll down for the current list of qualifying cars.

What are the OZEV standards based on?

Plug-in vehicles must meet two simple criteria to qualify for a grant, whereas cars were formerly put into three categories, depending on their range from a single charge and carbon dioxide emissions.

The latest simplified rules state simply that cars must have an overall emissions figure of less than 50g/km CO2 using the 'WLTP' emissions test standard, and be able to drive 70 miles with no tailpipe emissions at all. The figures used come from the standard industry test that every new car must undertake. They aren’t representative of real-world conditions (cars generally have a shorter range and higher CO2 emissions in normal driving), but are currently the only common standard.

CO2 emissions

Electric range from one charge

Grant

Grant cap

Cars

Under 50g/km

At least 70 miles

35% of RRP

£2,500

Motorbikes

0g/km

At least 31 miles

20% of RRP

£1,500

Mopeds

0g/km

At least 19 miles

20% of RRP

£1,500

Vans

Under 50g/km

At least 60 miles

35% of RRP

£3,000 or £6,000

Plug-in grant 2021 - OZEV approved list of cars

In theory, this grant is worth up to 35% towards the cost of any new electric car costing less than £35,000. This effectively means all suitably priced EVs on sale qualify for the £2,500 maximum grant.

The majority of vehicles in this category are pure electric cars, with no petrol or diesel engine, so they have no carbon dioxide exhaust emissions. Fuel cell cars such as the Toyota Mirai also qualify.

Electric car grant FAQs

Can I get an electric car grant for used cars or pre-registered cars?

No. The grant is only available for the first owner of brand new cars, ruling out any used cars, including pre-registered vehicles, which normally count a dealership as the first owner. Home charging grants are available for buyers of new or used cars, however.

How do I claim the grant?

You don’t need to do anything. The supplying dealer does it on your behalf and automatically reduces the price of the car by the value of the grant.

Can I get the electric car grant if I’m purchasing on finance?

Yes, the grant will be deducted from the total price, which will reduce your monthly payments.

Can I be paid the electric car grant in cash?

This isn’t an option. As it’s designed to boost sales of plug-in cars, the grant is only used to adjust the price: you never actually see the money, let alone get it in your pocket.

Electric car grant changes

The grant was first launched in 2011, when the government was offering £5,000 off the price of plug-in cars. There was no price limit, so taxpayers were subsidising buyers of cars that included the £100,000 BMW i8 and £90,000 Porsche Panamera S E-Hybrid.

It was also a major boost to plug-in hybrid cars such as the Mitsubishi Outlander PHEV, which aren’t as green as fully electric cars - since drivers are able to simply drive the car without charging, burning far more fuel than the official figures state in the process - but had enough battery range to qualify for the grant at the time. Meanwhile, drivers who travel only short distances and charge religiously between journeys may find they are able to travel 100% on electric power.

In March 2016, the scheme was revamped. The maximum incentive was cut to £4,500 and categories were introduced, which meant that plug-in hybrids generally lost half of their subsidy. A price cap was introduced for categories 2 and 3.

The scheme was altered again in October 2018 when the discount was cut to £3,500 for electric cars and was axed entirely for plug-in hybrid vehicles. The grant has been reduced annually since, to the current level of £2,500.

 

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