UK Cars
Does the Electric Car Grant Actually Work? The Evidence One Year On
The Electric Car Grant has been applied to more than 140,000 new EVs. But buyer awareness is low and most cars get the smaller discount. We weigh the evidence.
The Electric Car Grant passed its first anniversary this summer, and the honest answer to whether it works is: partly, and not for the reasons the press releases suggest. More than 140,000 new electric cars have been bought with the discount applied, which sounds like a triumph. Yet the surveys say most car buyers still do not know the scheme exists, and most eligible cars receive less than half the headline discount. Both things are true at once, and unpacking them tells you a lot about how EV policy actually behaves in the real world.
What the grant is, quickly
The scheme launched in July 2025 with £2 billion behind it, and offers either £3,750 or £1,500 off a new electric car priced at or below £37,000, with 58 models currently eligible. Band 1, the full £3,750, goes to models with the lowest manufacturing emissions; Band 2 models get £1,500. Buyers do not apply: the dealer applies the discount at the point of sale. The full rules and eligible list are on GOV.UK, and we keep our own guide to the eligible models updated.
The case that it is working
Start with volume. Department for Transport figures show the grant was applied to more than 140,000 new EVs registered in its first year. March 2026 was the highest-demand month for the scheme since launch, coinciding with the best month ever for new EV registrations. The SMMT's July data reinforces the point from the market side: around four in ten BEV registrations are delivered by ECG-eligible models. When a large minority of the electric market is flowing through one discount scheme, that scheme is doing real work.
The stronger argument is about price. Auto Trader's analysis found the average price gap between a new electric car and an equivalent petrol model fell from £1,935 before the grant to just £40 a year later, and for a period in spring 2026 the average new EV actually cost less than its petrol equivalent once discounts and grants were counted. Eight of the ten most-viewed new EVs on Auto Trader this year either qualify for the grant or carry an equivalent manufacturer-funded discount. On the affordability question, the evidence is fairly clear: the grant has helped close the gap it was designed to close.
There is also a quieter, structural effect. Because eligibility depends partly on manufacturing and supply-chain emissions, the scheme rewards models built with verified sustainability targets, including the new Nissan LEAF built at Sunderland, which qualifies for the full £3,750. A purchase subsidy that nudges where cars are made is doing something a simple price cut cannot.
The case that it is underperforming
Now the uncomfortable half. Carwow surveyed 2,400 in-market buyers and found that before the grant launched, 33% were considering an electric car. A year later that figure was 38%, a five-point rise that merely returns interest to roughly its 2019 level, still below the 45% peak recorded in 2022. Awareness is the deeper problem: just 36.7% of shoppers knew the scheme existed by January 2026, meaning roughly two-thirds of the buying public had never heard of the discount they might be entitled to.
The structure dilutes the effect too. Of the roughly 60 eligible cars, only about a dozen qualify for the full £3,750, so most buyers get £1,500 and a smaller nudge than the headlines imply. Among consumers who did know about the scheme, only 18% said it had materially reduced the financial barrier to buying an EV. Seven in ten said they would be more likely to switch if every qualifying model got the full amount.
There is also the attribution problem. EV registrations are up sharply, with battery electric cars taking a 27.5% share of July registrations, up 44.5% year on year. But the same period brought high fuel prices, heavy manufacturer discounting, widening model choice and low company car tax rates. Petrol touched almost 160p per litre in late May. Electricity used for vehicle charging rose 28% in the first quarter as drivers responded to pump prices. Any honest assessment has to admit the grant is one ingredient in a stew that also includes the BiK rules making EVs the default company car, cheap overnight home charging, and the simple arithmetic of electric versus petrol cost per mile.
So does it work?
The fairest reading is that the grant works on prices but struggles on awareness. It has measurably pulled the new EV price gap towards zero, and a large share of the electric market now runs through it. What it has not done is change the conversation for the majority of buyers who never knew it existed, partly because its quiet, dealer-applied design means nobody ever claims anything or feels the saving land.
That design choice is a feature as well as a bug. Automatic application means no paperwork, no deadweight loss from unclaimed entitlements, and no fraud surface. But it also means the government is running a subsidy it barely advertises, funded until the 2028/29 financial year, and hoping the price tags in showrooms do the communicating.
For an individual buyer, none of the macro debate matters much. If the car you want is on the eligible list, the discount is real money off a real invoice, and combined with the used market's falling prices it strengthens the case for switching. If you are buying soon, check the eligible list against your shortlist before you negotiate, and read our used EV market guide for the second-hand side of the story. The grant is not the whole reason the UK electric market is growing, but it is a genuine part of it, and its weakest point is not the money. It is the silence.