In short: the government's Electric Car Grant (ECG), introduced in July 2025, knocks up to £3,750 off the price of an eligible new electric car costing £37,000 or less. It's a separate scheme from the older Plug-in Car Grant, which closed for ordinary passenger cars in 2022 (the Plug-in Van Grant is still running, but only for vans, trucks, taxis and motorcycles — not cars). If you're financing the purchase, the discount is applied by the dealer before finance is arranged, so it reduces the amount you need to borrow.
How much is the grant worth
The Electric Car Grant gives up to £3,750 off a new electric car, applied as a point-of-sale discount by the dealer. Eligibility depends on the car's price (capped at £37,000) and the manufacturer meeting the scheme's sustainability criteria — it isn't a simple flat discount available on every EV, so check the specific model against the current eligible-vehicle list before assuming it applies.
Eligibility
To qualify, a car needs to be a new, eligible battery-electric model priced at £37,000 or under, from a manufacturer that meets the scheme's manufacturing-emissions criteria. The grant is applied automatically as a point-of-sale discount by the dealer; there's no separate application for the buyer to complete.
What this means for your finance figure
Because the grant reduces the purchase price before finance is arranged, it directly lowers your borrowing requirement. For example, a new electric car listed at £34,000 with the full £3,750 grant applied effectively finances like a £30,250 vehicle — which on a typical HP structure can mean a meaningfully lower monthly payment than the sticker price would suggest.
Model the difference yourself
Run the discounted price through our HP calculator to see the monthly payment with the grant applied.
Not the same as the Plug-in Van Grant
It's easy to see an old headline about a "plug-in grant" and assume it applies here — it usually doesn't. The Plug-in Van Grant (extended with £120 million of funding through 2025–2026) covers vans, trucks, taxis and electric motorcycles, with different discount tiers based on vehicle weight, not ordinary passenger cars. If you're buying a car, the Electric Car Grant is the one that applies to you.
The catch: funding and eligibility can change
The ECG is a funded scheme with defined eligibility criteria, not an open-ended entitlement — the list of qualifying models and the funding available can be adjusted. If you're planning an electric car purchase around this grant, it's worth confirming the specific model's current eligibility and discount amount with the dealer before finalising your finance application.