What we know about electric car grants worth £1,500 as first eligible EV models confirmed

Yahoo

15 hours ago

The government has unveiled a series of Citroen models eligible under the government's new £650 million electric car grants scheme.
The first electric car models eligible for the government's new £650 million electric car grants have been announced.
Drivers will be able to save £1,500 with the purchase of new Citroen e-C3, e-C4, e-C5 and e-Berlingo cars, the Department for Transport (DfT) said.
The discount will be automatically applied at the point of sale, and will enable motorists purchasing a new electric car to save either £1,500 or £3,750, depending on sustainability criteria.
The government's vow to make it cheaper to buy an electric car comes as part of its goal of banning the sale of new fully petrol or diesel cars and vans from 2030.
Transport Secretary Heidi Alexander said: 'With the first four models approved today, and more to come over the next few weeks, this summer we're making owning an electric car cheaper, easier and a reality for thousands more people across the UK."
Under the government's zero emission vehicle (Zev) mandate, at least 28% of new cars sold by each manufacturer in the UK this year must be zero emission, which generally means pure electric.
Across all manufacturers, the figure during the first half of the year was 21.6%.
Alexander has already announced £63m worth of funding to boost charging infrastructure, including £25m of support for local authorities to provide at-home charging for motorists who don't have driveways.
Another £8m will be spent on powering electric ambulances and medical fleets across 200 sites within the NHS, while road signs for EV charging hubs will be introduced on major A-roads in England.
What do we know about the new subsidies for EV drivers?
The grants will be funded through a new £650m scheme announced on 14 July, which will be restricted to vehicles priced up to £37,000.
The Department for Transport (DfT) said at the time that 23 new models were available for less than £30,000.
Amounts given will be based on a car's 'sustainability criteria', the DfT said, with the greenest vehicles placed in band one, meaning a grant of up to £3,750. Band two vehicles will receive up to £1,500.
Edmund King, AA president, said: 'This discount of £1,500 for some more affordable EVs will help a number of those with tighter budgets. We look forward to seeing the full list of discounts up to £3,750 on more models to really push the market forward.'
Ian Plummer, commercial director of online vehicle marketplace Auto Trader, previously said 'any incentives' to help people buy an electric car are welcome as many drivers are 'put off by the high upfront cost'.
Prior to the government's announcement, The Telegraph reported that the grants would provide a huge boost for Nissan, which has a plant in Sunderland, but would be unlikely to help Tesla, whose cars are generally beyond the scheme's price range.
How many people are buying EVs?
In the first half of this year, electric car sales in the UK increased by a third, according to figures from the Society of Motor Manufacturers and Traders (SMTT) lobby group.
Sales of battery electric cars rose by 34.6% to 224,838 vehicles between the start of January and the end of June.
Of the 191,200 cars sold in the UK in June, a quarter (almost 47,400) were electric vehicles.
The government wants to phase out the sale of new petrol and diesel cars from 2030 onwards, although hybrids can be sold until 2035. It says all new cars and vans will have to be 100% zero emission by 2035.
How much more expensive are electric cars to buy?
The average cost to buy an electric car in the UK is currently about £46,000, according to financial researchers NimbleFins, although it says that prices range from £14,995 (for a Dacia Spring Electric) to as much as £330,000 for a Rolls-Royce Spectre.
Among luxury electric brands such as Tesla, Porsche, Audi, Jaguar and Mercedes, the average cost is about £69,000, while a non-luxury EV is about £33,000 on average.
NimbleFins said the cost of an average small car is about £22,000, rising to £27,000 for a medium-sized car and £35,000 for an SUV, inclusive of petrol and electric models.
The Electric Car Scheme says the average petrol car costs £21,964, compared to about £49,000 for an EV.
How much do electric vehicles cost to run?
The average cost of running a car in the UK is £3,357, according to NimbleFins. This includes fuel, car insurance, repairs, road tax and the purchase or depreciation per year.
It said that despite electricity prices currently being high, fuel costs much less with an EV than a petrol or diesel engine.
The average cost for a mile of driving is about 7p on a standard electricity tariff or as low as 2p per mile on a time of use EV tariff, charging the vehicle at off-peak times, such as during the night.
For a petrol or diesel car, NimbleFins says the cost of fuel per mile can be anything between 13p and 17p.
The Electric Car Scheme says drivers of EVs can save up to £1,500 per year over 10,000 miles in fuel costs than with a petrol or diesel.
Read more
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Volkswagen reports electric vehicles sales surge in 2025 (DW)