New £3,750 Electric Car Grant Aims to Reignite UK’s Road to Net Zero

Written By Optima Electrical Training

In a significant push to get Britain back on track with its climate goals, the UK government has launched a new £650 million Electric Vehicle (EV) Grant Scheme, offering drivers up to £3,750 off the price of a new electric car. The announcement, made on Monday, revives direct subsidies that were scrapped in 2022—and comes amid signs that electric car sales are falling short of official targets.

The grant, which applies to EVs priced at £37,000 or less, is part of a broader strategy to accelerate the transition away from petrol and diesel vehicles ahead of the government’s 2030 ban on new fossil-fuel car sales.

What’s Being Offered?

Under the new scheme, drivers buying eligible electric cars can receive a discount of either £1,500 or £3,750, depending on the vehicle's emissions profile and how sustainably it was manufactured. These savings will be applied automatically at the point of sale, with manufacturers required to apply for the scheme in order to participate.

According to The Times, models that qualify for the full £3,750 discount must meet high standards for environmental performance—not just in their tailpipe emissions, but also in how they are made. This means some lower-cost models, especially those imported from countries with coal-heavy energy grids, could be excluded.

Vehicles must be registered before the end of the 2028–29 financial year, giving buyers and automakers a multi-year window to benefit from the initiative. Applications from manufacturers opens on July 16, 2025.

Why Now?

The revival of the EV grant reflects growing concern in Westminster that Britain's transition to electric transport has stalled. Although EVs made up around 21.5% of new car sales earlier this year, that figure remains well below the government's target of 28% for 2025—and even further from the ambitious 80% goal for 2030.

Transport Secretary Heidi Alexander said the scheme would help both consumers and the planet. “This grant ensures those who are buying the greenest cars benefit the most, helping people save money while supporting our net-zero targets and British manufacturing.”

What Cars Are Eligible?

The grant is limited to electric vehicles priced under £37,000, effectively excluding most premium models, such as those from Tesla, Mercedes-Benz, and BMW. Instead, the scheme is aimed at boosting demand for mass-market and compact EVs—cars more affordable to families, commuters, and fleet operators.

Models likely to qualify include the Nissan Leaf, MG4, Vauxhall Corsa Electric, and select Renault Zoe and Fiat 500e variants. However, the final eligibility depends on whether the manufacturer’s application is approved and how the car scores on environmental metrics.

As The Guardian reports, the government wants to encourage vehicles built in countries with strong environmental regulations—particularly those manufactured in the UK.

Reaction From Industry and Campaigners

The response from the auto industry has been broadly positive. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), welcomed the move, calling it "a major vote of confidence in the UK motor industry."

Simon Williams, EV spokesperson for the RAC, praised the return of the grant, saying it was “a timely and much-needed boost for both consumers and the environment.”

Not everyone is convinced. Some critics argue that the grant will mainly benefit buyers who were already planning to go electric, rather than persuading sceptical motorists. Others question whether subsidies for cars are the best use of public funds at a time when investment in public transport and cycling infrastructure is still lacking.

In a column for The Times, columnist Andrew Ellson went further, calling the policy "politically misguided," and warning that it risks favouring wealthier drivers without significantly changing behaviour.

Charging Infrastructure Also Gets a Boost

To complement the new grant, the government also announced £63 million in additional funding for EV charging infrastructure. This includes support for home and workplace charge point installation, as well as investment in public charging networks.

With over 82,000 public charge points already available in the UK—and numbers growing—ministers hope to address lingering concerns over charger availability, especially in rural and lower-income areas. As Reuters notes, a lack of charging infrastructure remains one of the biggest barriers to EV adoption.

A Step Forward — But Is It Enough?

The reintroduction of EV grants is undoubtedly a bold step—one that could help Britain’s automotive sector recover some momentum in the shift to net zero. But questions remain: Will the scheme drive adoption fast enough? Can it reach the kinds of consumers who are still hesitant to switch? And how will it interact with upcoming changes to vehicle emissions standards and road pricing?

For now, though, it appears the government has sent a clear signal: EVs are not just the future—they’re the present. And if you're thinking about making the switch, the next few years might be your best opportunity.

Further Reading & Sources

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