The government has just made almost half of the new electric car more affordable by bringing back electric car grants with a £650 million incentive scheme worth up to £3,750 per car – but it only on those models priced below £37,000.
The Electric Car Grant (ECG) will be offered at the point of sale for new eligible electric cars. Like the old Plug-in Car Grant which was killed off in 2022, the manufacturer will apply for the money so the paperwork for consumers is minimised. Drivers will start to benefit from discounts from 16th July, with funding available until the 2028/29 financial year.
The grant amounts are based on strict criteria, with all eligible vehicles needing to have a list price below £37,000 - currently we reckon that is about 58 of the 130 electric models on sale in the UK. There are two levels of grant with what is described as ‘the greenest vehicles’ in band one receiving up to £3,750 and band two vehicles receiving up to £1,500.
However, just a day before the grant comes in action the scheme has raised more questions than it's answered. Which vehicles will be eligible for the largest grant will be decided on what the government is called a Science Based Target (SBT) reflecting carmakers overall commitment to cut greenhouse gasses in line with the Paris Agreement. But there are currently no other details on how it will work with the bands or if the full amount is a percentage of the list price of the car.
Renault Group confirmed to Electrifying.com that it is signed up for Science Based Targets but was unaware which of its models with qualify or what band they will be in. Other car makers ware in a similar position and are waiting for more details from the government.
Launching the scheme, Transport Secretary Heidi Alexander said: "This EV grant will not only allow people to keep more of their hard-earned money – it’ll help our automotive sector seize one of the biggest opportunities of the 21st century.
"And with over 82,000 public chargepoints now available across the UK, we've built the infrastructure families need to make the switch with confidence.
"This is our Plan for Change in action. We're backing British drivers, British jobs and British growth."
Ginny Buckley, the chief executive of Electrifying.com, said: "Despite a new electric car being registered every 60 seconds in June, sales to private buyers have stalled while fleet buyers continue benefiting from substantial tax breaks on EVs.
"Our November survey of over 11,000 UK drivers found 76% were put off by upfront EV costs, so I welcome news that incentives are returning - they'll be the firecracker the private market needs."
