Grants for new electric cars to be reintroduced
Officials hope the measure – restricted to vehicles priced at up to £37,000 – will encourage more drivers to switch to electric motoring.
The DfT said 33 new electric car models are available for less than £30,000.
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 Heidi Alexander, Transport Secretary
The Government has pledged to ban the sale of new fully petrol or diesel cars and vans from 2030.
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.'
Drivers buying electric cars can benefit from tax breaks if their employer has a company car scheme, but there have been no universally available grants since they were axed by the Conservative government in June 2022.
The new grants will be funded through a new £650 million scheme.
As the biggest savings will be given to cars with the strongest green manufacturing credentials, drivers will be picking models that are not only better for their wallets, but better for the planet too RAC head of policy Simon Williams
Amounts will be based on a car's 'sustainability criteria', the DfT said.
The greenest vehicles will be in band one, which means a grant of up to £3,750.
Band two vehicles will receive up to £1,500.
Car manufacturers will be able to apply for the money through the Electric Car Grant from Wednesday.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the announcement is a 'clear signal to consumers that now is the time to switch'.
He went on: 'Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade.'
RAC head of policy Simon Williams said discounted cars should start appearing at dealerships 'within weeks'.
While battery-only EVs are much cheaper to buy and run than most realise, surveys show that cost misperceptions are the primary reason for hesitance. A generous grant of this nature gives a new group of interested buyers a gentle nudge Dan Caesar, Electric Vehicles UK
He added: 'As the biggest savings will be given to cars with the strongest green manufacturing credentials, drivers will be picking models that are not only better for their wallets, but better for the planet too.'
Dan Caesar, chief executive of lobby group Electric Vehicles UK, said: 'While battery-only EVs are much cheaper to buy and run than most realise, surveys show that cost misperceptions are the primary reason for hesitance.
'A generous grant of this nature gives a new group of interested buyers a gentle nudge.'
Ian Plummer, commercial director of online vehicle marketplace Auto Trader, said 'any incentives' to help people buy an electric car are welcome as many drivers are 'put off by the high upfront cost'.
The DfT announced last week that road signs for electric vehicle charging hubs will be introduced on major A roads in England.
28%
The percentage of new cars sold by each manufacturer in the UK this year that must be zero emission
It also launched a £25 million scheme for local authorities to support residents without off-road parking to recharge electric cars using cables connected to their homes which run along gullies embedded in pavements.
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%.
Prime Minister Sir Keir Starmer announced in April that sales of new hybrids that cannot be plugged in will be permitted to continue until 2035.
Changes to the Zev mandate also mean it will be easier for manufacturers who do not meet the targets to avoid fines.
Conservative shadow transport secretary Gareth Bacon accused the Government of 'forcing families into more expensive electric vehicles before the country is ready', adding the reintroduction of grants would mean 'more pain for taxpayers'.
He said: 'Last year, only one in 10 private purchases of new cars was electric. This is a product people demonstrably do not want.
'Last week, the Office for Budget Responsibility made clear the transition to EVs comes at a cost, and this scheme only adds to it. Make no mistakee: more tax rises are coming in the autumn.'
The Conservative Environment Network also described the grants as 'a waste of taxpayers' money', given declining prices for electric vehicles, but urged the Government to invest in charging infrastructure instead, 'giving confidence to a new generation of drivers to go electric'.
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