UK government reaffirms 2030 deadline with £650 million Electric Car Grant (ECG)

“The government’s recent announcement to pump over half a billion pounds into a new electric car grant is a clear statement that the 2030 deadline is here to stay and funding will be made available to persuade UK drivers to make the switch.” 

Jonny Berry, Head of Decarbonisation, Innovation & Strategy

Up to £3,750 towards the cost of a new EV

With range anxiety largely a thing of the past, reluctant switchers often bemoan the higher price tag of a brand-new EV. Accepting that headline price is only part of the picture and for many drivers the true cost of driving an EV is significantly lower than the equivalent petrol or diesel model. The government is seeking to overcome this objection with a publicly funded discount of up to £3,750 at the point of sale.

Which cars qualify for the discount?

Manufacturer applications to join the scheme opened on 16 July and a list of qualifying cars will be published in the coming weeks.

The first criteria to note is that it only applies to new electric cars priced at or below £37,000. While this may sound a little on the low side, there are in fact 33 EVs currently available from under £30,000.

The second requirement is for manufacturers to commit to verified science-based targets (SBTs) with embodied carbon scores (covering battery and production emissions) below defined thresholds. 

The exact details are yet to be published, but reports indicate that the greenest vehicles will be awarded the full £3,750 discount, whereas models meeting the price and SBT criteria but fall short of the stricter carbon‑intensity threshold will receive up to £1,500.

How long will the scheme last?

We can expect to see the first discounted cars appear within the next few weeks and government funding will be available until the 2028/29 financial year. Whether or not the scheme gets renewed beyond that point is very much open to question.

Given the fact that the vast majority of all new cars produced in 2029 will be fully electric or plug-in hybrid, the government is unlikely to continue subsidising a switch when there’s little in the way of alternative options.

£25 million for cheaper at-home charging

While a discount of c.10% on a new EV is certainly welcome, charging an electric car at one of the 82,000+ public charge points costs on average 51p/kWh using a slow/fast chargepoint and up to 76p/kWh for rapid or ultra rapid charging. In comparison, charging overnight at home can cost as little as 7p/kWh. That’s a quite a difference in anyone’s book and, depending on your annual mileage, could easily wipe out a large part of the £1,500 EV drivers can potentially save through lower running costs.

The government aims to close this gap with £25 million of local authority funding to support the rollout of innovative charging technologies that allow cables to run safely beneath pavements, connecting domestic chargepoints to vehicles parked on the roadside. The hope is that this will go some way towards helping drivers with little or no off-street parking to benefit from EV tariffs that equate to just 2p per mile.

If you are looking for charging solutions at your workplace or depot, take a look at the different electric fleet solutions we have to offer.

Is it the right time to make the switch?

The scale of funding on offer shows the government is fully committed to the 2030 ban on new petrol or diesel-only cars, and the extra support is clearly targeted at drivers for whom switching to electric is still impractical or undesirable. Combine the new grant with the growing choice of affordable EVs from electric-only manufacturers competing for a share of the UK market, and there has never been a better time to make the switch.

If you are looking for a new electric car on Business Contract Hire, take a look at our current in stock offers.

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