New EV discount scheme offers up to £3,750 off electric cars under £37,000

The UK government has reintroduced a grant for electric vehicles (EVs), offering buyers of new EVs priced under £37,000 a discount of up to 10%—in a move designed to boost uptake and widen affordability for greener motoring.

The revived scheme, scrapped in 2022, comes amid growing pressure to accelerate the transition to cleaner transport and includes a £650 million package to support EV adoption. The initiative will see buyers of eligible models receive up to £3,750 off the most sustainable vehicles, with a second tier offering discounts of up to £1,500.

The new threshold excludes premium models like Tesla, whose vehicles typically start at around £40,000, but could provide a strong incentive for drivers considering more affordable models, particularly from Chinese brands such as BYD and MG. BYD has overtaken Tesla in UK EV sales in recent months, driven in part by aggressively competitive pricing.

Transport Secretary Heidi Alexander said the move aims to make EV ownership more accessible:

“We are making it easier and cheaper to own an electric car. This 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 in the 21st century.”

According to the Department for Transport (DfT), there are currently 23 electric car models available in the UK for under £30,000.

John Lewis, CEO of EV infrastructure firm char.gy, welcomed the move:

“This brings us closer to a point where driving electric is accessible to everyone, not just the privileged few.”

The updated scheme ties discount levels to the sustainability of each vehicle’s production and supply chain, giving a further boost to manufacturers with stronger green credentials.

Simon Williams, head of policy at the RAC, said the new grants could be a “shot in the arm” for the EV market:

“Within weeks, discounted cars should start appearing at dealerships across the country. Drivers will be picking models that are not only better for their wallets but better for the planet too.”

Grant revived amid industry pressure

The announcement follows the Labour government’s decision to relax the zero-emission vehicle (ZEV) mandate introduced by the previous Conservative government, after intense lobbying by UK carmakers. The original policy set binding sales quotas for electric vehicles, with fines of up to £15,000 per non-compliant vehicle.

Carmakers warned that meeting the targets was forcing unsustainable discounting. However, environmental campaigners argued the mandate was essential to maintain momentum on net-zero targets.

Despite the lobbying, the latest figures suggest that manufacturers are on track to meet 2024’s electric car sales goals without major shortfalls.

Affordability remains a key barrier for many drivers considering the switch to electric. EVs typically cost more upfront than petrol or diesel models, although running costs are significantly lower. Public concern over “range anxiety”—the fear of running out of charge—is also easing, with the UK’s charging network expanding rapidly.

There are now over 82,000 public charge points across the UK, and more local authorities are introducing kerbside charging solutions for drivers without access to private driveways.

The new grant scheme is expected to go live immediately, with discounted prices expected to appear on forecourts in the coming weeks. For consumers seeking to beat the 2030 ban on new petrol and diesel car sales, this could be the push they’ve been waiting for.

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New EV discount scheme offers up to £3,750 off electric cars under £37,000