Benefits of the New Electric Car Grant for UK Drivers and Businesses
The UK Government has relaunched its Electric Car Grant (ECG) on July 16, 2025, with the aim of accelerating the adoption of low-emission transport. The grant offers point-of-sale discounts on new electric vehicles (EVs) priced at £37,000 or less, helping reduce the price gap between EVs and petrol/diesel cars in the UK market.
To be eligible for the 2025 ECG, a vehicle must be a new EV, priced under £37,000 (including VAT and essential extras), meet strict environmental and technical standards assessed by the government, come from a manufacturer with a net zero commitment, and be purchased or leased by qualifying buyers through approved channels.
The grant ranges from £3,750 to £1,500, depending on the vehicle's sustainability criteria. Eligible vehicles include the Mini Countryman Electric, Citroën e-C4, Vauxhall Corsa Electric, and Renault Zoe, among others.
Private drivers can benefit from lower upfront costs for brand-new EVs, reduced monthly payments when leasing or using Personal Contract Purchase (PCP), and fuel savings of up to £1,500 per year compared to petrol/diesel vehicles. Leasing customers can have the full grant applied to the lease price or deposit. The grant also offers reduced leasing costs for eligible electric vehicles.
The ECG is applicable to private drivers and businesses. It applies at the point of sale and is valid for brand-new, UK-registered EVs. The grant can result in savings of up to £100 per month over 36 months for the Mini Countryman Electric, for example.
Manufacturers must meet criteria such as science-based emissions targets and sustainable battery sourcing to be eligible for the grant. Ineligible vehicles include models with low sustainability scores, most Chinese-built vehicles, luxury vehicles, and used electric cars.
The ECG is part of a £650 million EV funding package, supporting British and European-made EV competitiveness and encouraging consumers to consider sustainable vehicle options. The full list of eligible cars is expected to be published in late July 2025.
In summary, the 2025 ECG offers significant savings for new electric vehicle buyers, helping to make EVs more accessible and competitive in the UK market. With the grant's relaunch, consumers have a new incentive to consider electric vehicles as a viable and cost-effective alternative to traditional fossil fuel-powered cars.
- The UK Government's Electric Car Grant (ECG) also extends to businesses, offering them savings on new electric vehicles, thereby promoting the adoption of energy-efficient transport in various industries, including finance, technology, and energy-intensive businesses.
- As the UK Government continues to invest in technological advancements, the relaunch of the ECG is expected to stimulate growth in the technology sector, as manufacturers improve the sustainability of their vehicles and meet the stringent environmental and technical standards set by the government.
