Good news for anyone thinking about making the switch to an electric car: the UK government has just brought back a generous incentive that could save you up to £3,750 on your next vehicle. The new EV grant, announced in July 2025, is aimed at making electric vehicles (EVs) more affordable—especially for private buyers.
If you’ve been sitting on the fence about buying an electric car, this might be the nudge you’ve been waiting for. Let’s break down what the new EV grant means, who’s eligible, and how you could benefit.
So, What Is the New EV Grant?
Put simply, the new EV grant is a government-backed discount on certain brand-new electric cars. It’s applied at the point of sale, meaning you don’t need to fill out forms or wait for a refund. If the vehicle qualifies, you’ll see the discount come straight off the price—easy.
Here’s how it works:
- Up to £3,750 off the price of eligible electric vehicles
- Applies only to new EVs priced at £37,000 or under
- Discount is available instantly through participating dealerships
- No application needed—the dealership handles it all
It’s the government’s way of encouraging more people to go electric, while also supporting the UK’s long-term net-zero goals.
Why Bring Back the EV Grant Now?
The original plug-in grant scheme ended in 2022, and since then, the market has shifted. While EV adoption grew among company fleets and business users, private buyers started pulling back—mostly due to the higher upfront cost of electric cars.
With the new EV grant, the government hopes to:
- Make EVs more accessible to everyday drivers
- Support manufacturers facing stricter emissions targets
- Speed up the shift away from petrol and diesel cars
In short, it’s about making cleaner cars more affordable, and helping the UK stay on track for its zero-emissions vehicle (ZEV) targets.
Which Cars Qualify for the New EV Grant?
To get the full £3,750 discount, the car you buy needs to meet some specific criteria. It must:
- Be fully electric (no hybrids!)
- Cost £37,000 or less
- Be built by a manufacturer committed to sustainability (like using net-zero supply chains and low-emission battery production)
The government is still finalising the list of eligible vehicles, but here are some models expected to qualify:
- Dacia Spring – the UK’s most affordable electric car
- Vauxhall Corsa Electric
- Citroën ë-C4
- Mini Countryman E
- Skoda Enyaq iV
- Select trims of the VW ID.3 and Ford Puma Gen-E
Luxury EVs like Tesla, BMW, and Mercedes are mostly priced above the £37,000 cap, so they won’t be included. Some Chinese-made EVs may also be excluded if they don’t meet environmental production standards.
How Much Could You Save?
If your chosen car qualifies for the full new EV grant, you could save £3,750 off the purchase price. That’s a big deal—especially when combined with the lower running costs of an electric car.
On average, EV drivers save around £1,500 a year on fuel and maintenance compared to petrol or diesel vehicles. So with the new grant on top, the long-term savings really start to add up.
And if you’re financing your car? That discount reduces the loan amount, which means lower monthly payments. A win-win.
The Bigger Picture: Why This Grant Matters
This isn’t just about cheaper cars—it’s part of a much wider push towards a cleaner, greener future.
The UK’s ZEV mandate means car manufacturers must sell a minimum percentage of zero-emission vehicles each year:
- 28% in 2025
- 80% by 2030
- 100% by 2035
The new EV grant supports that target by making electric cars more appealing to private buyers—not just fleets and businesses.
It also encourages car makers to clean up their supply chains, since only vehicles with sustainable production processes are eligible for the full grant.
What About Dealers and Finance Providers?
For car dealers and finance companies, the new EV grant brings fresh opportunities:
- Increased footfall: More customers will be exploring EV options again
- More manageable finance: Lower ticket prices mean more affordable finance packages
- Updated vehicle values: Better residual value outlooks for eligible models
At Sorbus Finance, we’re working closely with our dealer partners to ensure they’re ready. From adjusting finance calculators to updating residual value forecasts, we’re here to help make this transition smooth—and profitable—for everyone involved.
Quick FAQs
When does the new EV grant start?
Applications open to manufacturers from 16 July 2025, and qualifying cars should start appearing in dealerships shortly after.
Is it available for used cars?
No. The new EV grant only applies to brand-new electric vehicles.
Do hybrids count?
Nope—only pure battery electric vehicles (BEVs) qualify.
How long will the scheme run?
The funding is expected to last until 2028–29, although specific terms may evolve over time.
Final Thoughts: Is Now the Right Time to Go Electric?
If you’ve been thinking about switching to electric, the new EV grant could be the perfect reason to take the plunge. With up to £3,750 off eligible models, lower running costs, and more sustainable options than ever, EVs are finally becoming a practical choice for more people.
And with the government backing the industry again, this isn’t just a flash-in-the-pan incentive—it’s a long-term shift toward affordable, eco-friendly driving.
📞 Talk to Sorbus Finance Today
At Sorbus Finance, we’re here to help drivers, dealers, and lenders make the most of the new EV grant. Whether you’re looking to finance your next EV or build finance packages around eligible models, we’ve got the tools and expertise to support you.
Contact our team today to learn how we can help you take advantage of this exciting change in the UK electric vehicle market.