The UK electric-car grant explained

The UK plug-in car grant offers buyers up to £3,000 off a new electric car costing less than £50,000

In the UK, new electric cars with a list price of less than £50,000 are eligible for the government’s plug-in car grant (PiCG) – or an electric car subsidy. The amount you can claim has recently been reduced, and now only covers pure-electric vehicles with a zero-emissions range of more than 70 miles. 

The grant was originally set at £5,000 and covered both plug-in hybrid and pure-electric vehicles. However, the rules changed in 2018, meaning the grant now covers 35% of the purchase price, up to a maximum of £3,000.

The plug-in car grant – together with 0% company-car tax on electric cars during the 2020/21 financial year – is designed to encourage people to switch to cleaner electric cars and vans, thus reducing overall CO2 emissions and helping to meet the Government's increasingly stringent emissions targets.

It also makes zero-emissions vehicles more affordable: generally, battery-electric vehicles are more expensive than petrol and diesel equivalents, and while parity is expected in the coming years, higher purchase prices today can be off-putting for some electric or plug-in buyers.

In 2019, electric cars made up around 1% of new car sales, and the need to increase that figure is clear. That number already looks to be improving through 2020; to date, the plug-in car grant has helped thousands of buyers purchase low and zero-emissions vehicles.

How does the plug-in car grant work?

Previously, the Government sorted electric and plug-in hybrid (PHEV) cars into three groups – Category 1, 2 and 3 – to determine how much of a grant they were eligible for. However, changes introduced in 2018 meant that Category 2 and 3 vehicles (exclusively plug-in hybrids) were no longer eligible for Government support. Nowadays, only Category 1 cars qualify and the term 'Category 1' itself has been dropped.

The Office for Low Emission Vehicles (OLEV) is the official body in charge of the grant. It decides which cars are eligible based on things like CO2 emissions, safety features, warranty length and top speed.

The plug-in car grant now covers:

  • 35% of the purchase price of a brand-new car (up to a maximum of £3,000)

Cars that qualify must:

  • Have official CO2 emissions of less than 50g/km

  • Be able to travel at least 70 miles with no CO2 emissions

  • Feature on the OLEV's approved vehicle list

  • Have a list price of less than £50,000

How do I apply for the plug-in car grant?

You don’t. This process is handled by the dealership selling the car, rather than the customer buying. Most dealerships will make it clear exactly what the eligible car’s price was before and after the grant, so you can tell exactly how much you’ve saved in the process. Manufacturers are responsible for applying to OLEV to ensure their cars are approved for the grant.

Are there any other ULEV grants or subsidies available?

Yes – the government will give you up to £500 towards the installation of a home ‘wallbox’ charging unit. These must be officially approved and you need to have your own off-street parking. You also need to make sure you're the registered keeper of an eligible car, or at the very least have one on order.

Any car that emits less than 75g/km of CO2 is exempt from the London Congestion Charge, but you need to apply to Transport for London (TfL) to ensure you're not billed for driving in the capital.

Does my car qualify for the grant?

Below is OLEV's official list of cars that are eligible for the grant. It doesn't include some vehicles that technically qualify for the grant, but at the time of writing have not been confirmed as eligible. The list is growing every month, so be sure to check the Government website for the most recent additions.

Does my van qualify for the grant?

The grant also provides a discount for a handful of vans. They must have CO2 emissions of less than 75g/km and be capable of travelling at least 10 miles without emitting any CO2 at all. The grant will pay up to 20% of the purchase prices for the following vans, up to a maximum of £8,000.

The LEVC London taxi is also eligible for a discount: the grant will cover 20% of its purchase price, up to a value of £7,500.