UK Cars
The Electric Car Grant So Far: What the Money Has Actually Done
More than a year after launch and with an extra £1.3 billion behind it, the grant has reshaped the price of going electric. Here is what the evidence says it has and has not achieved.
Grants for electric cars have a mixed reputation, because Britain has run them before and retired them. The current Electric Car Grant, launched in July 2025, is a bigger and more targeted affair: £1,500 or £3,750 off the list price of qualifying models, funded by the Treasury rather than by a fixed pot that runs dry in weeks. With an extra £1.3 billion added at the Autumn Budget to extend the scheme, it is worth asking what a year of grant-supported buying has actually demonstrated. The evidence so far points three ways at once.
What the grant has clearly done
The first achievement is visibility of price. By applying the discount at the point of sale on a published, growing list of eligible models, the grant turned a vague promise of future affordability into a number on the windscreen. Eighteen models currently qualify for the full £3,750, with more than 45 on the £1,500 tier, and the list has grown steadily, with four more models added in the most recent round of approvals.
The second is measurable effect at the market level. The SMMT's July analysis noted that around four in ten battery electric registrations are grant-eligible models, and that July's record BEV volumes followed a subdued 2025 in which some buyers explicitly delayed switching until confirmation of their model's eligibility. When buyers wait for a discount to be confirmed before purchasing, the discount is doing real work on demand, whatever else is also moving the market.
The third is the shape of the market it encourages. Because full-grant eligibility depends partly on sustainability standards in manufacturing as well as price caps, the scheme pushes carmakers to compete on both the sticker price and how the car is made, which is a subtler lever than the old grant's simple price test.
How a car qualifies
The scheme's mechanics matter if you are shopping, because eligibility is not a matter of opinion. A model qualifies in one of two bands, with the full £3,750 reserved for cars under the lower price threshold that also meet the scheme's sustainability criteria in manufacturing, and the £1,500 tier covering models under the higher threshold. The discount is applied at the point of sale, so the price you negotiate already includes it, and the eligible list is published on GOV.UK, which makes checking a specific model a two-minute job before you visit a dealership.
Two practical notes from the list's short history. The bands move: models get added as applications are approved, so a car that missed the list last month may be on it now. And the price caps mean the grant deliberately concentrates its firepower on the affordable end of the market, which is also where the best value electric cars cluster anyway.
What the grant has not done
It has not closed the mandate gap. The market is tracking towards a 27.4% battery electric share for 2026 against a 33% target, as we set out in our mandate analysis, and the grant, at its current scale, is a nudge rather than a bridge. The SMMT's chief executive has been blunt that the market's growth is being carried by discounts totalling billions across the industry, grant and otherwise, and that this cannot be sustained indefinitely.
It also has not reached every buyer equally. The price caps exclude the more expensive half of the market entirely, so a household shopping for a large electric SUV sees no grant at all. And the discount only matters to people buying new; with used EVs now undercutting their petrol equivalents by £1,800 on average, the used market is quietly delivering affordability that no grant needs to fund.
The interaction that complicates everything
The grant now sits alongside a policy that works in the opposite direction: the 3p-per-mile road charge arriving in April 2028. Announced a year ahead of implementation, it gave buyers a visible future cost to weigh against a visible current discount. The honest reading of buyer behaviour this year is that the grant has won the argument for now, with registrations accelerating rather than stalling after the road-charge announcement, but the two policies will keep pulling in opposite directions at the point of every purchase decision until running costs settle into a predictable pattern.
The short version
A year of evidence says the grant is doing what grants do well: accelerating the buyers who were nearly ready, concentrating manufacturer attention on the affordable end, and making the market's progress visible in monthly numbers rather than press releases. It is not closing the mandate gap on its own, and it was never going to. The more interesting question for the next year is whether the eligible list keeps expanding fast enough to matter, and whether the market's own momentum, now visible in record used sales and rising used values, eventually makes the grant a footnote rather than a prop.