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The government is introducing new grants that will cut the cost of certain new electric cars by up to £3,750, as part of efforts to encourage drivers to switch from petrol and diesel vehicles.
Discounts will be available for eligible vehicles priced up to £37,000, with the largest reductions reserved for the most environmentally friendly models, according to the Department for Transport (DfT).
Carmakers can begin applying for funding from Wednesday, and the RAC expects discounted vehicles to start appearing at dealerships "within weeks."
This initiative supports the government's commitment to ban the sale of new petrol and diesel cars by 2030. Under the scheme, discounts will range from £1,500 to £3,750.
Manufacturers must apply for each model to qualify, with funding distributed on a first-come, first-served basis.
Once approved, the discount will be automatically applied to the vehicle’s price at the dealership, meaning customers will benefit from a lower purchase price without needing to take any action.
The government is expected to release a list of qualifying vehicles in the coming days.
This funding is part of a £650 million scheme designed to reduce the cost of electric vehicles (EVs), with support available for the next three years.
Currently, there are about 1.3 million EVs on UK roads, but only around 82,000 public charging points.
Over the weekend, Transport Secretary Heidi Alexander announced an additional £63 million investment in EV charging infrastructure.
EV grants were previously in place but were discontinued in 2022 under Conservative leadership. Originally introduced in 2011 to make EVs more affordable, the grants began at £5,000 per vehicle but were gradually reduced to £1,500 by the time the scheme ended.
At the time, the DfT said the focus of funding would shift toward addressing key barriers to EV adoption—such as expanding public charging networks—and supporting electric vans, taxis, and motorcycles.
