Electric car grants explained

At first glance, electric vehicles are more expensive than comparable cars fitted with a traditional internal combustion engine (ICE), which runs on petrol or diesel.

But the bigger picture – the world’s push to achieve Net Zero by 2050 – is the reason why we’re switching to EVs, so the UK government is tempting car buyers into EVs by offering them grants to make them more affordable. It’s the carrot to the government’s stick of higher car tax levels for the most polluting cars, fuel taxes, etc.

When the grants were first launched in 2011, the government – through its Office for Low Emissions Vehicles (OLEV) – gave electric car buyers £5,000 off the cost of their plug-in car, which meant that plug-in hybrids were also included.

The government has, over the years reduced the value of the grant, made hybrids ineligible and introduced an upper limit of £32,000, so cars that cost more to buy than this don’t qualify.

So where does this leave consumers who want to make the switch to electric?

How do cars qualify for the grant?

The system of grants for low-emission vehicles has been tinkered with by successive chancellors of the exchequer, so while plug-in hybrids initially qualified, they no longer do. The grant is now restricted to fully electric vehicles, with no tailpipe emissions (which means it also includes hydrogen fuel cell cars such as the Toyota Mirai).

The current rules state that cars must emit less than 50g/km of CO2, according to the WLTP test that determines the official figures for mpg and CO2. The vehicle must also be able to drive 70 miles without any tailpipe emissions at all. Plug-in hybrids often meet the 50g/km target, but their smaller batteries mean that most only have a range of about 30 miles, so they no longer qualify.

Choosing a grant-eligible car

The good news is that despite the increased limitations on the types of car qualifying, there are now a lot more electric models on sale, with a number under the £32,000 limit.

We won’t list all the eligible cars, because that list will change on a regular basis over the next few years, as carmakers all take their turn jumping on the electric-powered bandwagon, but examples at time of writing this article include the BMW i3, Honda e, Vauxhall Corsa-e, MINI Electric and Fiat 500e.

When deciding on which grant-eligible model you’re going to buy or lease, make sure that the particular variant or trim level you want is covered: models such as the Volkswagen ID3 and Hyundai Kona Electric have versions that qualify for the grant and some that don’t.

What the grant is worth – and how to claim it

The current position is that the Office for Zero Emissions Vehicles (OZEV) – as it’s now known – offers £1,500 towards the cost of a fully electric vehicle. The payment is made directly to the car dealer selling the vehicle, who makes a claim after selling the car. This also means that they have to publish the price of the car with the grant taken off – you’ll notice that when looking at ads for EVs on sale.

And, of course, because the dealer has to make the claim, there’s no paperwork for you to fill out and no red tape to go through. Which is always a bonus.