The UK electric car grant explained

The UK Government’s plug-in car grant has recently been updated – we explain the changes and how it works

In the UK, new electric cars are eligible for a plug-in car grant. This sees the Government put money towards the purchase of zero-emissions vehicles, forming a cash incentive for buyers to switch to electric cars and vans.

The plug-in car grant, along with higher taxes for some new diesel cars, is aimed at helping the Government get closer to its climate and emissions targets.

It also makes it easier for buyers to choose low-emissions cars. So far, the plug-in car grant has helped buyers purchase more than 160,000 such vehicles.

How does it work?

The Government sorts all cars on sale into seven categories, depending on how much carbon dioxide (CO2) they produce and how far they can travel without producing any emissions. Until October 2018, incentives applied to Category 1, 2 and 3 cars – deemed to be the least polluting – with separate categories for motorcycles, mopeds, vans and taxis, too.

However, changes to the plug-in car grant mean that Category 2 and 3 vehicles (exclusively plug-in hybrids) are no longer eligible for Government support, while the discount available for Category 1 cars has shrunk from £4,500 to £3,500.

The Office for Low Emission Vehicles (OLEV) is in charge of the grant. It decides which cars are eligible based not only on emissions, but also on factors such as safety features, warranty length and top speed.

The plug-in car grant now covers:

  • 35% of the purchase price of a brand-new Category 1 car (up to a maximum of £3,500)

It is important to note that the plug-in car grant does not:

  • Apply to Category 2 or Category 3 cars

  • Apply to Category 1 cars excluded from the Government list

  • Amount to a £5,000 reduction in the price of any vehicle – this was the grant offered up until 1 March 2016

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

In short, 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.

Are there any other ULEV grants or subsidies available?

Yes – the government will give you up to £500 towards the installation of a home-charging ‘wallbox’ 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 have one on order).

Any car that's eligible for the plug-in grant is – due to its sub-75g/km CO2 emissions – also automatically exempt from the London Congestion Charge.

Does my car fall Category 1?

Cars in Category 1 produce less than 50g/km of CO2 and can travel at least 70 miles without producing any CO2 (i.e. in full electric mode). For each of the electric cars listed below, the plug-in car grant will cover 35% of the purchase price, up to a maximum of £3,500.

In the future, plug-in hybrid cars could fall into Category 1, but as yet no PHEV on sale is capable of travelling 70 miles under electric power only.

Below is a rundown of the Category 1 cars eligible for the plug-in car grant: