The UK government’s newly launched electric vehicle grant supports the transition to zero-emission vehicles and encourages sustainable automobile manufacturing.
The electric vehicle grant makes it easier and cheaper to own an electric vehicle through £650 million funds for new EVs.
This intervention clarifies the government’s commitment to the transition of zero-emission vehicles during a period of unprecedented uncertainty for the automotive sector.
How electric vehicle subsidies work
The electric vehicle subsidies allow manufacturers to purchase new EVs at prices under £37,000.
The £1,500 or £3,750 grant will make these cars more affordable and even more people will have access to savings related to driving electricity.
This grant will help unlock potential savings of up to £1,500 a year at the running costs of drivers supporting the UK and other manufacturers.
Eligibility relies on meeting the highest manufacturing sustainability standards, thereby driving growth in the automotive and charging sector.
The grant will be available tomorrow (July 16, 2025). This will result in confirmation of vehicle eligibility by the Ministry of Transport.
The list of eligible vehicles will be updated on the department’s website as the vehicle is approved. The scheme has funds available until fiscal year 2028-2029.
The closing date remains under review, and electric vehicle grants may be subject to amendment or early closure without notice if funds are exhausted.
A sustained production car will benefit
The electric vehicle grant has two bands. £3,750 for the most sustainably produced cars and £1,500 for the environmental standards.
This recognizes the need to address both embedded carbon emissions through vehicle lifespan and tailpipe emissions. Vehicles that do not meet minimum sustainability standards are not eligible for grants.
The minimum environmental standard is that manufacturers retain validated science-based targets. The science-based goal is the commitment that companies make to mitigate environmental impacts, in line with the UK’s international climate commitments validated by independent science-based goal initiatives.
The amount of grants available per vehicle depends on the level of emissions associated with the production of the vehicle.
Increased EV charging infrastructure
The government has also announced a package of broad measures to support the continued deployment of charging infrastructure.
These will support £25 million funds to provide cross-pavement charging channels, £30 million grants to install charge points at vans, coaches, HGV depots, support for the transition of the road freight and coach sectors, and £8 million funds to install chargers at NHS sites.
All these measures already support more than £6 billion in private funding in the pipeline, further boosting the UK’s charge points rollout by 2030.
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