Competitor MG offers rebates on electric vehicles as they mirrOR Chinese rivals, uncertainties in government subsidies linger
The UK Government has introduced a new Electric Car Grant to encourage the sale of environmentally friendly vehicles. To qualify, manufacturers must meet strict environmental standards related to carbon emissions associated with vehicle production, including assembly and battery manufacturing.
The grant offers two tiers: up to £3,750 for EVs produced with the most sustainable practices and £1,500 for vehicles meeting some environmental criteria. To qualify, manufacturers need to hold a verified science-based target that commits to reducing environmental impact in line with the UK’s climate goals, verified by the independent Science Based Targets Initiative.
The carbon intensity of electricity in the countries where a vehicle’s assembly and battery production take place is assessed. This assessment breaks down as 30% weight to vehicle assembly location’s electricity carbon intensity and 70% weight to battery production location’s electricity carbon intensity.
China's reliance on fossil fuel-powered manufacturing and battery production makes it unlikely that models assembled in China, including those from MG, GWM, BYD, and Leapmotor, will qualify under the new rules. This is because China's electricity grid is heavily fossil fuel-dependent, with about 62% fossil fuel electricity in 2024 compared to 35% in the UK.
Key qualifying elements for all EVs, not limited to Chinese manufacturers, include a zero-emission range of at least 100 miles WLTP and a minimum speed of 60 mph (96 km/h) for safe use on motorways.
In response to the UK Government's new Electric Car Grant, MG Motor UK has announced a £1,500 discount on the MG4 EV and MG5 EV, effective from July 21, 2025. The discounted prices make MG's electric models among the cheapest in the market. Similarly, GWM UK has introduced a £3,750 'Green Grant' for its ORA 03 models, bringing the starting price down to £21,245 on the road.
Leapmotor, a Chinese EV manufacturer, has also reduced the price of its compact T03 city car by £1,500 to £14,495, undercutting the Dacia Spring by £500. The larger C10 SUV is being discounted by the full £3,750. These price cuts are designed to "avoid delays" caused by the Government's grant approval process, as it's unlikely that Leapmotor's Chinese-assembled vehicles will meet the required production standards.
The Transport minister, Lilian Greenwood, has confirmed that the UK Government's Electric Car Grant is restricted to manufacturers reaching minimum environmental standards. However, no specific mention has been made of MG Motor UK's response to the potential exclusion from the grant.
Guy Pigounakis, Commercial Director at MG Motor UK, has expressed MG's commitment to the EV sector and recognition of the economic and environmental benefits of electric vehicles. Stellantis, Leapmotor's UK distributor, has not been mentioned as receiving any government grant.
[1] Science Based Targets Initiative, https://sciencebasedtargets.org/ [2] Department for Transport, https://www.gov.uk/government/publications/electric-vehicle-grant-eligibility-criteria/electric-vehicle-grant-eligibility-criteria [4] Worldwide Harmonised Light Vehicle Test Procedure (WLTP), https://www.gov.uk/government/publications/worldwide-harmonised-light-vehicles-test-procedure-wltp/worldwide-harmonised-light-vehicles-test-procedure-wltp
- The new Electric Car Grant, despite being introduced to encourage the sale of electric vehicles, may not be applicable to certain manufacturers, such as MG, GWM, BYD, and Leapmotor, due to the high reliance on fossil fuels in China, where some of their vehicles are assembled and batteries are produced.
- To qualify for the full £3,750 grant, car manufacturers need to hold a verified science-based target that commits to reducing environmental impact, as assessed by the electric vehicle's assembly location's electricity carbon intensity and battery production location's electricity carbon intensity, with the Science Based Targets Initiative being the verifying body.
