EV Grant System (and its complications) explained in two minutes flat

July 21, 2025

New electric car grant offers up to £3750 off BEVs under £37,000. However, it's believed that if the base version of a model range costs under £37,000, all higher trims with the same battery will also be eligible – regardless of price.
Meanwhile, cars without high safety ratings may be excluded, no matter how cheap.

Two sustainability-based tiers are in place: up to £3750 for band one (greener) and up to £1500 for band two

Eligibility depends on manufacturers having verified science-based targets (SBTs) and low embodied carbon

UK-built cars, like the Nissan Leaf, won’t automatically qualify for higher grants, as previously suggested

Manufacturers must apply; discounts begin as soon as applications are submitted (from 16 July)

Grants apply retroactively to eligible sales made before formal approval

No paperwork for consumers – handled by manufacturers, dealers and Government

Full list of qualifying vehicles due soon from the Department for Transport (DfT)

The Government has suggested that Chinese-made EVs may not qualify for the new electric-car grants, as they’re based on the environmental standards of production.
Speaking on the BBC’s Today programme on 16 July, Transport Minister, Lilian Greenwood, said she did not expect any cars that are assembled in China to be eligible for the grant.

What Car? warns that even EVs made for European manufacturers in China, or European brands fitted with Chinese-made batteries, may not qualify for the Government’s full £3750 grant. At best, they may receive just £1500.

By contrast, identical models built in Europe, with European-sourced batteries, are more likely to get the full grant.

Eligibility is also dependent on battery size. What Car? notes that “consumers cannot safely assume that all versions of a specific model will get the grant,” as smaller-battery variants may qualify while larger-battery ones may not, even if their price is similar.

The confusion is affecting consumer confidence. What Car? found 21% of in-market EV buyers are delaying purchases until grant eligibility is clearer.

Guy Pigounakis, MG Motor UK’s commercial director, told Fleet News, “Order take across all brands, at dealerships, for electric cars under £37,000 quite literally stopped.”

Van grants

The Plug-in Van Grant (PIVG) provides financial support for businesses and individuals purchasing or leasing eligible electric vans. The grant offers a discount of up to £2500 for small vans (under 2500kg) and up to £5000 for large vans (2500kg to 4250kg).