Grant Savings & Green Driving: UK’s Government Electric Car Grant Explained
Thinking about going electric? The UK Government Electric Car Grant (ECG) is making the switch to EVs more affordable than ever. Whether you’re a personal driver or running a business fleet, this grant helps reduce the cost of electric vehicles and supports the move toward greener driving. It’s changing the way people think about both owning and leasing electric cars in the UK.
In this guide, we’ll explain what the Government Electric Car Grant is, how it works, who’s eligible, and why choosing to lease through Car Leasing could be the smartest, most cost-effective way to benefit. No jargon, just everything you need to know before making the switch.
What Is the Electric Car Grant, and What’s New?
Launched in July 2025, the Electric Car Grant (ECG) is injecting a substantial £650 million into boosting EV adoption across the UK. The scheme offers up to £3,750 off new electric cars priced at £37,000 or less, operating in two tiers:
Band One, worth £3,750, rewards EVs with exceptional sustainability credentials.
Band Two, worth £1,500, applies to models meeting the basic eligibility criteria.
The best part? Grants are automatically applied at the point of sale or lease, meaning no extra paperwork for you. Set to run until the end of the 2028/29 financial year, or until the funding runs out, the grant is designed to make switching to electric both easier and more affordable.
Which Models Qualify?
First out of the gate, four Citroën EVs qualify for the ECG: the ë-C3, ë-C4, ë-C5 Aircross, and ë-Berlingo, were confirmed as eligible for £1,500 off under the Electric Car Grant. Within days, 13 more models from Nissan, Renault, and Vauxhall joined the list, bringing the total to 17 eligible EVs, all currently falling into the £1,500 tier.
Standout additions include the Nissan Micra and Ariya, with the Sunderland-built Nissan Leaf expected to qualify for the full £3,750 grant later this year. Notably, certain Chinese-made
vehicles are excluded from the scheme, prompting brands like Leapmotor to match the government discount with their own offers.
Why the Grant Matters to You
The grant cuts upfront costs, making electric vehicles more affordable for UK drivers. With no paperwork involved, the savings are applied directly at delivery, offering a hassle-free experience. It also supports the growth of EV infrastructure and jobs, helping to boost charging rollouts and industry expansion. By encouraging more sustainable manufacturing, the grant provides wider access to electric vehicles across the UK, making the transition to greener transport easier for everyone.
The Downsides to the Electric Car Grant: What to Know
The Electric Car Grant does have its drawbacks. For example, Blue Badge holders may find themselves unintentionally excluded, as many accessible EVs exceed the £37,000 price cap, making them ineligible for support. The grant also doesn’t cover the cost of necessary adaptations, which can be a significant barrier. In addition, many luxury and non-European models - including most Teslas, BMWs, and Audis are ruled out due to both sustainability criteria and the price limits in place.
Lease to Maximise Your Grant Benefit
Leasing with Car Leasing provides instant cost reduction on eligible EVs, with no waiting around. It also offers predictable payments and flexibility for both personal and business drivers. You can combine your lease with one of our maintenance packages for complete peace of mind, and explore options tailored to your needs, whether that’s our latest electric car EV lease deals, personal car leasing, or business car leasing.
FAQs: Government Electric Car Grant
Who handles the grant?
Manufacturers apply to the Department for Transport (DfT). Savings are applied automatically by dealers it isn’t something buyers need to claim.
Can leased vehicles get the grant too?
Absolutely – if the EV is eligible, we’ll make sure the discount is reflected in your monthly costs.
What’s the difference between £1,500 and £3,750 grants?
The £3,750 is ideal for sustainability leaders. The £1,500 is suitable for standard efficiency models. At this moment in time, all current approved vehicles fall under the £1,500 band.
Why aren’t Teslas or BMW EVs eligible?
Tesla and BMW vehicles aren’t eligible for the grant as they’re either over the £37,000 cap or fail the rigorous sustainability benchmarks.
Are Blue Badge holders being excluded?
Unintentionally, many accessible vehicles exceed the price limit and adaptations aren’t subsidised, therefore are not included in the scheme. However, campaigners are currently calling for reforms.
How long does the scheme run?
The ECG scheme is set to run until 2028/29, or until the £650 million fund is depleted, whichever comes first.
Smart, Sustainable, & Savings-First
The Electric Car Grant isn’t just good news; it’s a strategic opportunity for UK drivers and businesses. When paired with savvy leasing via Car Leasing, you benefit from:
Immediate savings on eligible EV models
Fixed monthly payments, improved cash flow, and optional maintenance
Access to models like the Nissan Micra or Ariya, or plans to get the Leaf in winter
An eco-conscious choice with minimal hassle
Check out our electric-car EV lease deals or explore van leasing, car-leasing with maintenance, or business car leasing options to find your perfect fit. And if you need guidance on how leasing works or want help comparing options, our team are only a phone call, or email away!